The Credit Union Investment Authority Act expands the types of investments that federally-chartered credit unions are permitted to make. Specifically, the bill allows credit unions to invest in corporate debt instruments from non-credit-union entities, with a limit of no more than 10 percent of a credit union's capital in any single company's obligations. The bill also authorizes credit unions to purchase asset-backed securities, which are financial products backed by pools of loans or other assets. To implement these new investment powers, the National Credit Union Administration Board must issue regulations within one year of the law's enactment that establish standards for asset-backed security purchases, including requirements on minimum issue sizes, sale prices, and investment grades. The legislation affects federally-chartered credit unions and their members by giving these financial institutions greater flexibility in how they deploy their capital.
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