Once operational, Constitution used aggregated surplus funds of Connecticut credit
unions for investment. Initially, the objective was to provide credit unions with lowcost
liquidity from surplus credit union funds recycled to those credit unions
experiencing shortfalls in their funding due to a variety of reasons. The aggregating
of resources also resulted in investor credit unions receiving market yields on
investments made through Constitution. The guiding investment philosophy
involved a commitment to a matched investment strategy in which sources of funds
(credit union deposits at Constitution) were, for the most part, matched by dollar,
rate, and maturity with uses of funds (Constitution's investments). Constitution
employed this matched portfolio management strategy for reasons of prudence and
safety and incorporated early withdrawal penalties to insure commitments. In late
1980, Constitution began focusing on developing a full range of financial and
payment services for member credit unions.