Survey on NCUA’s TIPS and rural district eligibility proposals

TIPS proposal:

NCUA is proposing to expand the investment authority of natural person federal credit unions by allowing them to invest in Treasury Inflation Protected Securities (TIPS). TIPS are securities issued by the Treasury Department in which the principal increases or decreases with inflation or deflation as measured by the Consumer Price Index. When the bond matures its holder receives either its original principal or the inflation-adjusted principal; whichever is greater. For more information about the securities, visit the
Treasury Department website .

NCUA has previously not authorized credit unions to purchase the securities because they are tied to the CPI, but the agency is now of the opinion that they represent a useful hedge for some credit unions against inflation. The proposed regulation is available on the Treasury Department website .

Should credit unions be given the authority to invest in TIPS?

Are there other prohibited investments you believe should be authorized for federal credit unions?