Request for Advisory Opinion – Correspondent Services

You asked if a federal credit union (FCU) could provide the following correspondent services to
other credit unions: share draft processing; check collection; ACH origination and receipt; wire
transfers; coin and currency; and a line of credit. An FCU may offer lines of credit to other
credit unions under its statutory lending authority in the FCU Act. An FCU may provide the other
proposed services to credit unions pursuant to its incidental powers authority.

Correspondent services are services an FCU provides to other credit unions that it is authorized to provide to its own members or as part of its operation. 12 C.F.R. §721.3(b). You indicated to OGC staff that your client FCU provides share draft processing; check collection; ACH origination and receipt; and, wire transfer services to its members. You also indicated the FCU operates a
centralized vault, picking up and delivering coin and currency to its branch facilities as needed.
As the FCU currently offers these services to its members and performs a cash center function for
its own operation, these activities meet the definition of correspondent services.

Pursuant to the FCU Act, an FCU is expressly authorized to extend lines of credit to other credit
unions, subject to approval by the FCU’s board. 12 USC §1757(5)(C).