What is CUSO Partners Investments (CPI)? 

CPI, a credit union service organization, is a limited liability company owned by participating federally and state chartered credit unions.

Why would a credit union want to invest in CPI? 

CPI permits each participating credit union to set its individual annual rate of return.

Is there a limit to the annual rate of return for each individual credit union? 

No, the annual rate of return is determined by each credit union based on the type and quantity of securities transacted effected on an annual basis.

What activities or services related to the routine, daily operations of credit unions will CPI effect?

CPI is structured to effect investment portfolio securities transactions with Primary Market New Issue Agencies, Secondary Market transactions for Agencies, Mortgage Backed Securities and Certificate of Deposits as well as other Investment Securities allowed by NCUA regulatory guidelines.

Does CPI require special approval from the regional or national offices of the NCUA? 

No, CPI will engage in pre-approved CPI activities authorized by the NCUA.

What is a “participating credit union?” 

A participating credit union is one having made the initial capital contribution and requesting to be designated a “member” of CPI.

What is a “member?”

In a limited liability entity structure, a member owns a fractional interest similar to a shareholder in a corporation.

Is a limited liability company a taxable entity? 

No, a limited liability company is a pass-through tax entity with all items of gain, loss, income, deductions, and credits passing through to the individual members in amounts as set forth in the Limited Liability Company Agreement.

What is a “limited liability company agreement?”

A limited liability company agreement (commonly referred to as an “operating agreement”) is the controlling document, similar to corporate bylaws, which sets forth the rights, responsibilities and earnings distributions of the participating credit unions.

What is the maximum potential loss for a participating credit union?

Each participating credit union’s potential loss is limited to its initial capital investment, such as member’s share of any undistributed assets of the limited liability company, and any amount previously distributed to such member (only if and to the extent required by state law.),

Who will manage CPI?

CPI will be managed by those participating credit unions designated as “managing members.”

What is the minimum initial capital investment to become a “non-managing member” of CPI?

Is a participating credit union required to make any type of additional investments or contributions? 

No.

Is a participating credit union required to affect a minimum amount of securities transactions in any given time period? 

No, but the annual rate of return by the non-managing member, is directly proportional to the amount of effected securities transactions.

Who are the third-party vendors associated with CPI? 

The Credit Union Group of Sterne, Agee & Leach, Inc. (SALI) and Sterne Agee Clearing, Inc. (SACI) will provide contract underwriting, order execution, compliance, regulatory, and operational functions for CPI. None of the contract third-party vendors will be members of the limited liability company.

How will SALI and SACI be compensated? 

These third-party vendors will be compensated on a split-revenue arrangement. Each dollar ($1.00) of gross dealer concession will be allocated ten percent (10%) to SACI for transactional clearing services, with the remaining ninety percent (90%) of gross dealer concession allocated equally between SALI and CPI.

Will CPI effect securities transactions with credit unions that do not own an interest in the limited liability company? 

Yes, CPI and its member credit unions will actively solicit securities transactions with all federally and state chartered credit unions.

Will CPI provide asset-liability allocation and management services as is commonly provided by other securities broker-dealer firms? 

Yes, these services will be provided at no additional charge by SALI

Who is Sterne Agee?

Sterne Agee is a national NYSE member firm with a 100-year tradition of excellence in the investment securities industry.

Why would Sterne Agee be willing to make possible this unique and extremely profitable investment opportunity to all federally and state chartered credit unions?

Sterne Agee, by and through its affiliation with CPI and its affiliated credit unions, can more rapidly expand its business from a regional to a national investment and financial products provider.

Who could I contact for more information on CPI? 

Who should I contact for questions pertaining to legal and regulatory issues? 

Thomas S. Russell, Attorney at Law, sirthomas@arkansaslawyer.biz.

May I schedule a personal presentation at my credit union?