WASHINGTON (09/5/13)--Kathy Thompson, the Credit Union National Association's senior vice president for compliance and legislative analysis, discussed compliance with new loan participation regulations on the latest version of CUNA's "Inside Exchange" topical video series.
Beginning Sept. 23, all federally insured credit unions will have to comply with the National Credit Union Administration's loan participation rules. The effective date was pushed back from the original July 25 deadline, at CUNA's urging, to allow credit unions adequate time to review their policies and contracts as required by the revised regulation.
Thompson emphasized that, for the first time, state-chartered credit unions will be required to comply with this regulation,
Thanks to a working group that the NCUA put together of industry experts, important changes were made from the originally proposed regulation. The concentration limit by a single originator was increased from the proposed 25% of the credit union's net worth to the greater of $5 million or 100% of net worth. Thompson noted that the $5 million addition helps smaller credit unions remain active in the loan participations market.
For more detailed information on what your credit union can do to comply with the NCUA's loan participations regulation you can visit CUNA's e-Guide, which has details on the NCUA's loan participation rule. The NCUA has said that it will issue further guidance before Sept. 23 on how credit unions can seek waivers from the regulation's concentration limits.
News Now will cover any additional information the agency issues on the regulation.