ALEXANDRIA, Va. (3/30/16)--The National Credit Union Administration’s (NCUA) final bank notes rule appears in the Federal Register today, setting the effective date at April 29. The NCUA board voted unanimously last week to finalize the rule, which has the full support of the Credit Union National Association (CUNA).
The rule amends the maturity requirement for bank notes to be a permissible investment for federal credit unions by removing the word “original” from the current requirement that bank notes have “original weighted average maturities of less than five years.”
This permits federal credit unions to purchase bank notes with original maturities of greater than five years but remaining maturities of less than five years. The weighted-average maturity of less than five years also will maintain safety and soundness by avoiding excessive interest rate risk, according to the NCUA.
CUNA believes that easing credit union access to bank notes will result in more flexibility and greater efficiency in finding suitable bank note offerings.