Comments on: Is the weakening dollar going to affect your CU? http://cuinnovators.com/blog/is-the-weakening-dollar-going-to-affect-your-cu/ At CU Innovators, we help credit unions, CUSO's, and service providers create meaningful products and services for their members and clients. Mon, 14 Mar 2011 17:53:41 +0000 hourly 1 By: Dan Veasey http://cuinnovators.com/blog/is-the-weakening-dollar-going-to-affect-your-cu/comment-page-1/#comment-488 Dan Veasey Mon, 21 Apr 2008 12:55:11 +0000 http://blog.cuemployee.com/2008/04/01/is-the-weakening-dollar-going-to-affect-your-cu/#comment-488 A weaker dollar isn't bad for everyone. Because of a weaker dollar, one of our SEG's has found lots of new freinds they didn't even know they had. Now their products cost less than those of their European counterparts. It's actually be somewhat revitalizing to the local plant here, even some retired employees were going back in to work. A weaker dollar isn’t bad for everyone. Because of a weaker dollar, one of our SEG’s has found lots of new freinds they didn’t even know they had. Now their products cost less than those of their European counterparts. It’s actually be somewhat revitalizing to the local plant here, even some retired employees were going back in to work.

]]> By: Robbie Wright http://cuinnovators.com/blog/is-the-weakening-dollar-going-to-affect-your-cu/comment-page-1/#comment-487 Robbie Wright Wed, 02 Apr 2008 20:36:24 +0000 http://blog.cuemployee.com/2008/04/01/is-the-weakening-dollar-going-to-affect-your-cu/#comment-487 @The Compliance Guy -- Dang. I'm not exactly sure how it would work if the member would actually own the account through some type of pass-thru relationship with an external firm or what. You could structure it as a CUSO that invested in foreign currency, let the actual CU hold the funds as you suggest, or try out some type of loan-like participation with a foreign investment firm. But all great points. I'll have to read the proposed law and comments. Thanks for the heads up! @The Compliance Guy –

Dang. I’m not exactly sure how it would work if the member would actually own the account through some type of pass-thru relationship with an external firm or what. You could structure it as a CUSO that invested in foreign currency, let the actual CU hold the funds as you suggest, or try out some type of loan-like participation with a foreign investment firm. But all great points. I’ll have to read the proposed law and comments. Thanks for the heads up!

]]> By: The Compliance Guy http://cuinnovators.com/blog/is-the-weakening-dollar-going-to-affect-your-cu/comment-page-1/#comment-486 The Compliance Guy Wed, 02 Apr 2008 17:23:49 +0000 http://blog.cuemployee.com/2008/04/01/is-the-weakening-dollar-going-to-affect-your-cu/#comment-486 It is much more complicated than it appears on the surface. NCUA currently as an advanced notice of proposed rulemaking which would address whether the investment rules should be changed to allow corporate and natural person federal credit unions to make certain investments in foreign currency. This comes from the ANPR: "NCUA regulations implement the authority in the Act and establish requirements and limitations under which FCUs and corporates, respectively under Parts 703 and 704, can make investments. 12 CFR Parts 703, 704. The corporate regulation expressly states corporates may only make investments denominated in U.S. dollars. 12 CFR 704.5(b). For FCUs, the general investment rule does not expressly prohibit foreign currency denominated investments, but ties variable rate investments to a domestic interest rate and, consequently, limits FCU investment authority to U.S. dollars. 12 CFR 703.14(a)." Here's a link to the ANPR itself: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/P-703-704.pdf From the credit unions, the thought seems to be that if you want to offer foreign currency accounts, you'd need to invest in foreign currency for risk reasons. You may want to read some of the comments written in in response to the ANPR to see more of the industry concerns. It is much more complicated than it appears on the surface. NCUA currently as an advanced notice of proposed rulemaking which would address whether the investment rules should be changed to allow corporate and natural person federal credit unions to make certain investments in foreign currency. This comes from the ANPR:

“NCUA regulations implement the authority in the Act and establish requirements and limitations under which FCUs and corporates, respectively under Parts 703 and 704, can make investments. 12 CFR Parts 703, 704. The corporate regulation expressly states corporates may only make investments denominated in U.S. dollars. 12 CFR 704.5(b). For FCUs, the general investment rule does not expressly prohibit foreign currency denominated investments, but ties variable rate investments to a domestic interest rate and, consequently, limits FCU investment authority to U.S. dollars. 12 CFR 703.14(a).”

Here’s a link to the ANPR itself:
http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/P-703-704.pdf

From the credit unions, the thought seems to be that if you want to offer foreign currency accounts, you’d need to invest in foreign currency for risk reasons. You may want to read some of the comments written in in response to the ANPR to see more of the industry concerns.

]]> By: Robbie Wright http://cuinnovators.com/blog/is-the-weakening-dollar-going-to-affect-your-cu/comment-page-1/#comment-485 Robbie Wright Wed, 02 Apr 2008 05:19:56 +0000 http://blog.cuemployee.com/2008/04/01/is-the-weakening-dollar-going-to-affect-your-cu/#comment-485 Seems like it should be a pretty easy thing to accomplish. I'd open one too! Seems like it should be a pretty easy thing to accomplish. I’d open one too!

]]> By: Tony Mannor http://cuinnovators.com/blog/is-the-weakening-dollar-going-to-affect-your-cu/comment-page-1/#comment-484 Tony Mannor Tue, 01 Apr 2008 22:18:40 +0000 http://blog.cuemployee.com/2008/04/01/is-the-weakening-dollar-going-to-affect-your-cu/#comment-484 Call me an optimist but I dont think that this is a long term trend with our economy. The reason this hasnt been a big thing in banking, I assume, is that the Dollar has always been strong and the service was unneeded. It is a cool idea, and for my employee who hails from South Africa, it would be interesting as he plans his trips around the strength of the Rand. The idea that he could flip flop when it is R12to$1 and flip back to R4to$1 could allow him to make some serious money. But that would turn CUs into currency exchange brokers. That just leaves a weird taste in my mouth. Even though I would use it as an income tool myself and would probably switch to any CU in my area offering the service because I am geeky like that :) Call me an optimist but I dont think that this is a long term trend with our economy.

The reason this hasnt been a big thing in banking, I assume, is that the Dollar has always been strong and the service was unneeded.

It is a cool idea, and for my employee who hails from South Africa, it would be interesting as he plans his trips around the strength of the Rand. The idea that he could flip flop when it is R12to$1 and flip back to R4to$1 could allow him to make some serious money.

But that would turn CUs into currency exchange brokers. That just leaves a weird taste in my mouth.

Even though I would use it as an income tool myself and would probably switch to any CU in my area offering the service because I am geeky like that :)

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