Credit unions can now back loans without tying up cash

US credit unions will no longer have to set aside cash or collateral when they guarantee a loan for a member. This change gives them more flexibility to offer new types of financial products.

Before this, credit unions had to lock up money in a separate account every time they acted as a guarantor. This made it expensive and difficult to offer services like surety bonds, which are often needed for small businesses or contractors. Now, credit unions can use that cash for other purposes, potentially making it easier for members to get these types of guarantees.