ALEXANDRIA, Va.- In a legal opinion letter directly impacting CUNA Mutual's new employees sharing program, NCUA determined that federal credit union employees may work for CUSOs or other third parties selling nondeposit investment products to the federal credit unions' members. Also, if physical separation of the investment sales from the federal credit unions deposit taking activities is impracticable due to space constraints, the investment products may still be sold on the credit union premises. While federal credit union employees may not offer investment advice, under the program between Navy Federal Credit Union and CUNA Mutual Group, it is designed to make clear the employee providing investment advice or selling investment products, he/she is doing so on behalf of the CUSO or CUNA Mutual and not under the auspices of Navy. "Neither the CUSO nor CUNA Mutual will pay the employee for his services; rather they will compensate the FCU for the employee's time," the letter explained, which is expected to minimize potential conflicts of interest. Additionally, while physical separation emphasizes the line drawn between depository and investment services, such as degrees of risk and insurability, it is not necessary if the space is not available. However, appropriate measures should be taken to inform the member of the differences, including disclosures made when selling, advertising, or marketing nondeposit investments. Disclosures should be in writing and clarify that nondeposit investment products are not federally insured; are not obligations of the federal credit union; are not guaranteed by the federal credit union; involve investment risk; and if applicable are being offered by an employee who accepts deposits on behalf of the federal credit union and also sells nondeposit investment products on behalf of the CUSO or other third party. These disclosures should be clear and conspicuous and made orally as part of any oral sales presentation. Interested federal credit unions should refer to NCUA Letter to Credit Unions 150.

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