NAFCU letter to the NCUA regarding loan participations

September 17, 2013

The Honorable Debbie Matz, Chairman
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314

RE: Loan Participations

Dear Chairman Matz:

On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents federal credit unions, I am writing to you regarding the National Credit Union Association’s (NCUA) loan participation final rule implementation which takes place on September 23, 2013.

On July 3, 2013, NCUA extended the effective date for the loan participation final rule to give credit unions more time to meet the deadline. At that time, NCUA said that it would issue supervisory guidance to credit unions prior to September 23rd regarding how credit unions request for waivers of provisions of the rule will be handled by NCUA. NAFCU is concerned that the deadline is fast approaching and additional guidance has not yet been released.

NAFCU also understands that a federally insured credit union (FICU) that exceeds the single originator or single borrower concentration limits as of the effective date of the rule will be grandfathered and will not be required to divest of any loan participations it holds at that time. However, without additional time to comply or supervisory guidance on the waiver process, many of our members will not be allowed to purchase any additional participations until their participation portfolios comply with regulatory concentration limits.

Please consider extending the deadline beyond September 23rd for implementation of the loan participation final rule so that credit unions can digest the upcoming waiver guidance and are better able to make appropriate decisions about their loan participation portfolios. We look forward to seeing the guidance on waivers when it is released and want to make sure that credit unions have a good understanding of the waiver process going forward.

Thank you for your attention to this matter. I look forward to hearing from you regarding this important issue. Should you have any questions or would like to discuss these issues further, please feel free to contact me at or (703) 842-2212.


PJ Hoffman
Regulatory Affairs Counsel
National Association of Federal Credit Unions

cc: The Honorable Michael Fryzel, Board Member

The Honorable Richard Metsger, Board Member

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