LENEXA, Kan. – For the first time in its history, U.S. Central Credit Union will have natural-person credit union money on its books via a new certificate product, though the corporates' corporate is adamant that it is not out to bypass the three-tier system and will only work through corporates. U.S. Central is set to launch its Transferable Certificate Program allowing natural person credit unions to invest in U.S. Central certificates. The certificates will be sold through corporate credit unions and will settle at the corporates. Historically there has been a strict wall between U.S. Central and natural person credit unions. Mike Doherty, Managing Director of U.S. Central's Credit Union Investment Solutions subsidiary, said that was a major consideration with this product. He said the corporate spent a lot of time talking with each and every corporate to address any concerns. Doherty said any fear among corporates about U.S. Central moving closer to natural person CUs was overcome by corporates' trust in U.S. Central's management. U.S. Central stressed to corporates that it isn't their intention to try to work directly with credit unions. The certificates are designed to keep more of CUs' investments within the credit union industry. Doherty said of the top 300 credit unions, corporates only have about 16.5% marketshare of term investments. "Corporates for the most part pay a higher rate than what the agencies are offering. Why is the corporate network not attracting more dollars?" said Doherty. One reason is likely diversification, said Doherty. Credit unions have so much overnight money at their corporates, they don't want to have all their investments there as well. The U.S. Central certificate provides corporates a tool to meet member need for diversification since the certificate is on U.S. Central's books, not the corporate's books. The certificates are geared to larger CUs said Doherty. The minimum investment is $1 million with a minimum maturity of one year. The minimums go towards helping corporates offer their members diversification options for their long-term money. "Generally corporates do really well from an overnight standpoint. Market share is much more modest in term investments," said Doherty. U.S. Central did ask NCUA for its opinion on this program as it did not want it to affect its wholesale status. NCUA said it does not, according to Doherty. As for rates for the certificates, that will be left up to each individual corporate. This program is different than CUNA Mutual Group's Notes programs. CUNA Mutual Notes are for corporates to invest in to potentially use to create certificates for its member credit unions, however the CUs are still investing in the corporate, not CUNA Mutual. Whereas the U.S. Central program has CU money being held at U.S. Central. [email protected]