NCUA says yes to nonmember and public unit shares up to 50%

This relaxation on the percentage allowed at FCUs is a good first step.

Recently, the National Credit Union Administration board unanimously approved a proposal allowing federal credit unions to accept nonmember and public unit shares up to 50%.

The goal of this regulatory relief is to allow FCUs the ability to access additional funding sources that have been constrained by previous share rules. Furthermore, expanding access to public unit depositors—such as school districts and local governments—is logical, as they are a large source of potential depositors. For the year of 2018, total U.S. state and local governments spent $3.25 trillion and employed roughly 20 million people, according to the Center for Digital Government.

Historically, credit unions have focused on public employees joining as members. With the recent rule change, coupled with the increasing size, footprints and advances in technology of FCUs, targeting larger deposits from the actual public unit can be a greater opportunity than marketing membership to its employees. However, many obstacles are still present for FCUs trying to break into the public funds space.


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