NAFCU Reg Alert outlines NCUA proposal on loan participation, eligible obligation regs

NAFCU sent members a Regulatory Alert last week outlining the NCUA’s proposed rule amending the agency’s loan participation and eligible obligation regulations. The proposal offers flexibility for federally-insured credit unions (FICUs) to engage in indirect lending arrangements with fintechs and other third parties, including credit union service organizations, and then participate loans to other institutions as the “originating lender.”

Through the Regulatory Alert, NAFCU highlights:

  • the NCUA proposes to codify NCUA Legal Opinion 15-0813 to clarify that a FICU engaged in indirect lending can, in certain circumstances, be an “eligible organization”;
  • the proposed rule would remove the CAMELS ratings and well-capitalized requirements in section 701.23 of the NCUA’s eligible obligation regulation;


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