MARLBOROUGH, Mass. (10/1/14)--A Massachusetts Credit Union League-backed bill updating permissible investments for state-chartered credit unions is headed to Gov. Deval Patrick for his signature.
During informal sessions Monday, both chambers of the Massachusetts General Court advanced House 3594, An Act Relative to the List of Legal Investments prepared by the Commissioner of Banks. The action marks the first substantive update to statutory investment provisions for credit unions in decades, according to the league's newsletter, Daily CU Scan (Sept. 30).
"This bill is another step forward in improving the operating environment for credit unions. We look forward to its final enactment," said league President Paul Gentile.
The bill streamlines the petition process for the Commissioner of Banks to add permissible investments available to state-chartered credit unions. The list, released by the Commissioner of Banks July 1 each year, defines investment funds, stocks, bonds, notes and other interest-bearing obligations eligible for investment by credit unions or other financial institutions.
House 3594 also updates criteria to add permissible investments; organizes the criteria into one location within Chapter 171; and adds certain "prudent person" investment authority, in which a credit union has adequate policies and procedures to minimize any credit, market, liquidity, operational, legal and reputational risks.