February 14, 2013
Financial Stability Oversight Council
Attn: Amias Gerety
Deputy Assistant Secretary
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
RE: FSOC’s Request for Comments on Regulations of Money-Market Mutual Funds
Dear Financial Stability Oversight Council:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents federal credit unions, I am writing to you regarding the Financial Stability Oversight Council (FSOC) reform alternatives, published for public comment, on money-market mutual funds (MMMFs). 77 Fed. Reg. 69,455 (Nov. 19, 2012).
The FSOC is considering alternative regulations to recommend to the U.S. Securities and Exchange Commission (SEC). The three alternatives that the FSOC is considering are substantially similar to those the SEC declined to act upon.
Credit unions’ investment authority is very limited; thus, the alternatives the FSOC is contemplating would not have a direct impact on credit unions. However, credit unions and their members depend on robust securities markets to ensure they have the liquidity necessary to lend. Credit unions also have an interest in ensuring their members’ assets are safely invested, whether or not the investment decision is being made by the credit union itself. Thus, we recognize the importance of examining the regulatory parameters under which MMMFs operate.
In making its recommendations we would, however, urge the FSOC to ensure that it actions do not create market uncertainty that might impact adversely credit unions and their members. This is especially important as MMMFs finance a significant portion of Fannie Mae- and Freddie Mac- issued securities.
NAFCU appreciates the opportunity to comment. If you have any questions or concerns, please feel free to contact me at (703) 842-2215 or Tessema Tefferi, Senior Regulatory Affairs Counsel, at (703) 842-2268.
Sincerely,
Fred R. Becker, Jr.
President and CEO