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SimpliCD Issuance provides an effective secondary liquidity source for credit unions

Total credit union share certificate issuance topped $678 million in 2013

By: Bob Post, VP, Chief Investment Officer

Bob PostApril 22, 2014 - Recently, the National Credit Union Administration (NCUA) issued a final rule requiring board-approved liquidity plans for all credit unions; contingency funding plans for most credit unions; and, a federal liquidity source for the largest credit unions. The new rule recognizes the important role liquidity management plays in the safety and soundness of the credit union network and strives to increase resiliency for our network in the event of significant market stress. With this focus on liquidity, many credit unions are re-evaluating their liquidity position, and many are looking for secondary liquidity sources.

SimpliCD If your credit union needs to add another source for liquidity and/or to demonstrate the ability to raise such liquidity then issuing share certificates through SimpliCD may be an effective solution for your credit union. While many credit unions are familiar with SimpliCD for investing, some of you may not be aware of how simple it is to also issue through SimpliCD. Using SimpliCD for issuing allows you to leverage SimpliCD’s nationwide network of 4,300 credit union relationships to generate needed funds. Best of all, issuing through SimpliCD is as hassle-free and simple as investing through SimpliCD. Managed through Primary Financial, SimpliCD helped credit unions raise $678 million through certificate issuance in 2013 at very competitive rates and with the convenience of working with a trusted partner.

Issuing through SimpliCD at Corporate One

Here’s how the program works: When you’re seeking deposits, give your investment representative a call. Working together with Primary Financial, we’ll analyze the market to set a rate to attract the deposits you need. Your offering will then be published to SimpliCD’s nationwide network of credit union investors.  Primary Financial will act as custodian on your behalf and handle the paperwork just as they do on the investing side of SimpliCD. In addition to the convenience and reliability of using Corporate One to generate funds for you from other credit union investors through SimpliCD, there are many other benefits of using Corporate One as your source of deposits such as:

  • No subscription fees or broker fees
  • A centralized way to raise funds and generate liquidity
  • Access to a nationwide market of institutional investors
  • A competitive alternative to other funding methods
  • Assistance in developing terms of issuance
  • The ability to pool investors into one share certificate
  • The ability to issue certificates in amounts and terms that are tailored to your asset/liability needs
  • Free market analysis
  • Weekly Issuance Indication Rate email updates

If your credit union is interested in adding SimpliCD Issuance as a liquidity alternative or if you are looking to attract deposits, please give your Investments Services Representative a call at 866/MyCorp1. For more information visit the SimpliCD page on our Web site at www.corporateone.coop.

Bob Post can be reached at bpost@corporateone.coop or at 866/MyCorp1, ext. 9302.