Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Recently a friend of mine gave me a wonderful explanation of a financial intermediary. Most of us could not afford the risk of lending someone the money to buy a car. If the person had problems paying us back we would find it difficult to absorb the loss. That’s where a financial intermediary such as a bank or a credit union plays a valuable role in our economy. A credit union collects the deposits of its members and then prudently lends and invests those funds. If a loan goes bad, the credit union can typically absorb the loss through the earnings of operations. The role of corporate credit unions was that of financial intermediary for member credit unions. They were able to invest in ways that their member credit unions may not have had the ability or scale to invest. If the proposed corporate regulations go through in their current form, corporate credit unions will lose much of their ability to be financial intermediaries for natural person credit unions. It is questionable whether restrictions such as limiting the average lives of a corporate’s investment portfolio to two years will allow the corporates to generate enough income to fund their operations never mind offer a competitive return on investments to member credit unions.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

Peter Westerman

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.