July 18, 2002

Honorable Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 5th Street, NW
Washington, DC 20549-0609

RE: File No. S7-12-01

Dear Mr. Katz:

Evangelical Christian Credit Union (ECCU) respectfully submits this comment letter on its own behalf regarding its application (Application), dated September 21, 2001, to the Securities and Exchange Commission (Commission) for exemption from registration and regulation as a broker-dealer under the Securities Exchange Act of 1934.

We believe that our Application clearly establishes the merits of ECCU's request for exemptive relief. Accordingly, we do not propose to repeat here the discussion and analysis included in the Application. Nevertheless, we would like to take this opportunity to respond to the Commission's requests for comments on specific issues.

First, on the merits of the Application, we note that

• ECCU specializes in identifying and serving the needs of member organizations within our defined field of membership. Because of this focus, our products and services are tailored to help these member organizations become more effective donor-supported, non-profit organizations working in communities throughout the country and overseas.

• ECCU has been at the forefront of providing its member organizations with unique products and services that meet members' specific needs, such as tuition management services for Christian schools and loans for churches. As a not-for-profit financial cooperative, ECCU partners with its member organizations, looking for ways to help its members accomplish their mission and objectives, and in the process, providing financial services with practical solutions for day-to-day business needs. It is in that context that ECCU proposes to offer sweep accounts to member organizations.

• ECCU's member organizations will benefit both directly and indirectly from ECCU being allowed to offer the proposed sweep account service. Directly, member organizations will benefit from the opportunity for relatively higher yields and diversification of risk available through investment in no-load money market funds. Indirectly, the sweep program (by decreasing the amount of ECCU's deposit liabilities and associated capital requirements) will allow ECCU to provide services to more member organizations.

• Allowing ECCU the ability to offer this sweep account to our member organizations is consistent with the spirit of the Gramm-Leach-Bliley Act (GLB), which recognizes that certain limited activities can be conducted by a regulated depository institution without requiring registration as a broker-dealer. GLB specifically allows banks the ability to offer sweep accounts into no-load money market funds to their clients without registering as a broker-dealer, and the Commission by regulation extended this relief to thrifts in the GLB Interim Final Rules. Absent the requested relief, ECCU would be placed at a competitive disadvantage to banks and thrifts.

Second, while ECCU believes that the narrow focus of its proposed sweep product (which is limited to member organizations and is not available to individual consumers), is unique and should minimize or eliminate any concerns the Commission might have as to investor protection, we see no reason why exemptive relief should not be made available to the entire credit union industry.

In this respect, ECCU has carefully structured its sweep account product to comply with applicable portions of the May 11, 2001 interim final rules (Interim Final Rules) implementing GLB's functional exemptions from broker-dealer registration. Our sweep product would offer only no-load money market mutual funds that are available through Federated Securities Corp., a registered broker-dealer, on the same terms and conditions as are available to the many banks that utilize Federated's money market funds for their own sweep programs. Moreover, appropriate disclosures ensuring investor protection will be provided to ECCU's member organizations participating in the sweep program.

Third, ECCU does not believe that the requested relief raises any significant issues that need to be considered in connection with possible amendments to the Interim Final Rules. Although ECCU is aware that commenters have urged the Commission to relax certain of the sweep program requirements in the Interim Final Rules, ECCU's Application does not request such additional relief. Rather ECCU is prepared to comply with the requirements spelled out in the Interim Final Rules.

In conclusion, for the reasons set forth in the Application and this letter, ECCU urges the Commission to support and approve our application for exemptive relief from broker-dealer registration and regulation with respect to the proposed sweep account service.

Sincerely,

Scott T. Vandeventer
Executive Vice President &
Chief Operating Officer