FCUs Can Soon Invest in CMBS

Federal credit unions will soon be able to invest in commercial mortgage-backed securities and other commercial mortgage-related securities thanks to an expansion of their investment options by the National Credit Union Administration.Eric Envall, a regulatory compliance counsel with the National Association of Federal Credit Unions, an Arlington, Va.-based trade association for the federal credit union industry, told MortgageWire that the change was made following the NCUA's revision of FCU-related legislation. The revision, which takes effect after July 3, "enhances the federal charter and recognizes certain investments that used to be regarded as more risky and are now deemed to be less risky," Mr. Envall said. FCUs need to meet certain capital standards before they become eligible to take advantage of the revision. Mr. Envall said it is too early to tell to what extent FCUs will take advantage of the revision.