Pa. groups want portfolio restraints eased.

PITTSBURGH -- The Pennsylvania Credit Union League is pushing the state Legislature to enact a bill easing investment restrictions for credit unions.

Under the bill, state-chartered credit unions could get faster approval from the state banking department to make higher-risk investments. The state association is hoping to get the bill passed before the Legislature adjourns in November.

The current standard is "unworkable" because it takes too long for credit unions to get approval, said Roger D. Kelley, director of legislative affairs for the league.

"The process was too cumbersome for state-chartered credit unions," Mr. Kelley said. "Sometimes a month would elapse and an investment opportunity would pass."

The change in investment policy is part of a larger bill that would amend several areas of the state credit union code.

Now credit unions must get approval from the state banking department each time they invest in securities the agency said are higher-risk.

Streamlining the Process

Under the bill, a credit union would present the regulator with an investment plan which a credit union could follow without further approval.

"In the past credit unions had to go to the regulator for everything they wanted to do and this would streamline that process," said Glen A. Yeager, president of Utilities Employees Credit Union, a $240 million-asset institution in Reading.

Mr. Yeager serves on a league advisory committee that worked on the amendments.

The bill also would allow credit unions to purchase obligations issued by partially government-owned corporations, instead of only ones issued by wholly government-owned corporations.

The state banking department also supports the investment approval reforms because its office has been "inundated" with individual requests to make investments, said Secretary of Banking Sarah W. Hargrove.

The bill passed the state House of Representatives in early April and is awaiting a Senate vote, Mr. Kelley said.

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