All CUs with a connection with CD Services should have received communication from the receiver and understand their risks. As a result some brokers are expected to change from brokers to advisors, a category less subject to state regulatory control. New rules expected to be issued by the SEC will permit investors to purchase mutual funds before they have obtained a full prospectus. It may be possible for a credit union to clip a coupon from a newspaper and send in the money without having the complete story. Dramatically lower money market rates may induce some CUs to buy inverse floaters rather than reducing share rates.
Inverse floaters are almost never appropriate.
January 6 - A resurgence in CMOs and the absence of a required High Risk Security Test may induce some CUs to purchase these securities with inadequate risk analysis. CUs may need to be reminded that the combination of the revised Part 703 and IRPS 98-2 raised the standards for risk assessment.