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Flexible Regulations Permit FCUs to Accept Public Unit Deposits

ALEXANDRIA, Va.-Federal credit unions are permitted to accept public unit deposits within regulatory limits as part of the "BidAllegheny Program" in Pennsylvania, a recent NCUA legal opinion letter (03-1011) read. Allegheny County Treasurer John K. Weinstein recently wrote NCUA asking if federal credit unions could participate in the online auction...

By Staff Writer | Updated on December 16, 2003

ALEXANDRIA, Va.-Federal credit unions are permitted to accept public unit deposits within regulatory limits as part of the “BidAllegheny Program” in Pennsylvania, a recent NCUA legal opinion letter (03-1011) read. Allegheny County Treasurer John K. Weinstein recently wrote NCUA asking if federal credit unions could participate in the online auction program for general funds to be placed in certificates of deposit or share certificates. Approximately $250 million has been placed in this manner. The county is considering broadening the type and location of financial institutions invited to participate, including credit unions located in Western Pennsylvania. “An FCU may accept public unit and nonmember shares up to 20% of its total shares or $1.5 million, whichever is greater, and may exceed these limits with NCUA’s approval,” NCUA Associate General Counsel Sheila Albin wrote. “FCUs that qualify under NCUA’s Regulatory Flexibility Program are not subject to any limit on investment in public unit deposits.” She added that state law dictates whether federally insured, state chartered credit unions are allowed to participate.

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