The ABC’s of MBL
Those of you who do MBL loans or who are thinking about doing MBL loans should take a look at this recent FAQ released by the NCUA in its Quarterly Report.
As readers of this blog know, on January 1st NCUA instituted a radical new approach to MBL regulation under which credit unions are given greater flexibility in shaping their MBL programs while examiners still retain the responsibility for making sure that credit union programs are designed and implemented in a safe and sound way. This approach is certainly worth trying, but it is a work in progress that requires credit unions not only to embrace their increased flexibility but their increased responsibility and examiners to distinguish between an inappropriate MBL program and a creative one.
As such, this FAQ is an important guidance which should be read in conjunction with NCUA’s Examination Guide. Most importantly, the guidance reiterates that there are baseline elements that examiners are expecting to see in an MBL program. For example, credit unions are not just expected to have relevant policies and procedures commensurate with the sophistication of their MBL programs but also personnel qualified to manage these programs.continue reading »