FEDERAL WAY, Wash. (3/27/13)--The Washington State Department of Financial Institutions (DFI) has issued an interpretive letter indicating that state-chartered credit unions may make certain investments that otherwise would be impermissible, so long as they are for the express purpose funding employee benefit obligations.
DCU Interpretive Letter 1-13-02 creates parity between state and federal credit unions. Both now have the same investment latitude in funding employee benefit obligations through an employee benefit trust, said the Northwest Credit Union Association (Anthem Recap March 22).
Three limitations federal credit unions have in investing in this area now apply to state-chartered credit unions exercising the parity provision:
To segregate the employee benefit plan investments from the credit union's own investments, credit unions can establish an employee benefit funding trust using a trust agreement. For more detail, use the link.