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CU System
NCUAs MFOEL letter reassuring CUNA Mutual
MADISON, Wis. (7/25/12)--The National Credit Union Administration's (NCUA) July 20 letter on multi-featured open-end lending (MFOEL) and blending lending brought a reassuring response to credit unions Tuesday from CUNA Mutual Group.

NCUA's letter to federal credit unions confirms regulations that continue to allow MFOEL. However, it limits the amount of information a credit union may gather during the advance request, which will limit the use of MFOEL for some credit unions, CUNA Mutual said.

"The lending regulatory environment is evolving rapidly and more change is expected," said Bill Klewin, CUNA Mutual Group's director of regulatory compliance. "CUNA Mutual has worked with credit unions on lending compliance issues for more than 30 years and provides lending products that ensures compliance," he said.

"We will help credit unions through this change and continue to be here for them as the many new regulations emerge," Klewin said.

The Credit Union National Association and CUNA Mutual Group in February had urged the Consumer Financial Protection Bureau and the NCUA to revisit the regulation of MFOELs and to possibly provide additional guidance on these plans, noting that elements of current regulations were confusing some credit unions. (See RELATED STORY, NCUA offers guidance on multi-featured open-end loans. Use the link).

In its letter, NCUA discussed blended or multi-featured lending (MFL) plans. The agency clarified that open-end and closed-end lending are two distinct regimens and each require their own application, timing requirements and disclosures for the member-borrower.

The letter discussed blended loan programs, which combine open-end and closed-end processes and disclosures. It makes clear such an approach is not the same as a MFOEL program and that it must follow the distinct rules for open-end and closed-end lending, depending on the nature of the transaction, CUNA Mutual said.

CUNA Mutual welcomes the NCUA's efforts to clarify the compliance requirements surrounding MFOEL and blending lending, Klewin said. The company will continue to support credit unions to ensure an effective balance of safety and soundness, member convenience and compliance requirements.

Its products support credit unions' requirements for compliant and efficient lending programs.  "As credit union staff review their lending policies and procedures, we are the dedicated resource to ensure selection of the best approach for credit unions and their members," Klewin said.

Credit unions with LOANLINER-related questions should contact CUNA Mutual at 800-356-5012 or e-mail at loanlinercompliance@cunamutual.com.
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