Credit unions will be allowed to purchase securitized legacy assets, said NCUA Deputy Executive Director Larry Fazio.
The investments will be made available to "eligible investors," he said, which includes "just about anybody."
NCUA won't encourage nor discourage credit unions from buying the bonds. Credit unions won't create any systemic risk investing in the bonds, and because they are guaranteed, there won't be any credit risk. However, Fazio said investing credit unions would need to manage potential interest rate and liquidity risk.
Most bonds issued will have floating rates, but some will be fixed. The instruments will have an average weighted life of four to five years, and all will have "hard finals" of 10 years or less.
U.S. Central FCU's brokerage CUSO, CU Investment Solutions, has been selected to provide access to the bond auctions for interested credit unions and to answer questions about the investments.
"We wanted to make sure credit unions weren't crowded out, so we made these arrangements to make sure that's not the case," Fazio said.