NCUF Providing Alternatives to Corporate Investments
Faced with a significant drop in investment income from its Community Investment Fund, the National Credit Union Foundation has found another investment partner. Starting immediately, credit unions wishing to invest in the CIF are able to do so with a deposit with the National Cooperative Bank, FSB, a subsidiary of the National Consumer Cooperative Bank, while the relationship with the corporate credit unions will continue.
In the announcement, the NCUF painted a dire picture of its investments with corporate credit unions.
"Over the past two years, the value of all CIF investments has declined to approximately $250 million, down from a peak of $370 million," the NCUF explained. "During these past two years there have been a significant number of investments withdrawn for a variety of reasons. Several large certificates were withdrawn even though they carried a penalty and a stated rate of over 5%. Several withdrawals occurred because the investment return had dropped significantly. And unfortunately, some credit unions have withdrawn their CIF investments because they do not want to invest in corporate credit unions."
The foundation stressed it was grateful for its long standing relationship with the corporates that allowed it to inaugurate many of its most cutting-edge grant programs like REAL Solutions. But a side by side comparison of investments in the two institutions shows the NCB investments to have considerably greater flexibility and liquidity.For example, while corporate Certificates of Deposit have terms of two, three or five years, NCB CD's have terms of six, twelve and eighteen months.