Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
NCUA clarifies Reg Z definition of open-end credit
ALEXANDRIA, Va. (2/1/08)—The National Credit Union Administration (NCUA), in a recent legal opinion letter, clarified that an extension of consumer credit by a federal credit union (FCU) meeting the definition of “open-end credit” under Regulation Z is a "line of credit" under the NCUA’s regulations. What that means, the letter said, is that such credit would not be subject to a maturity limit. The Jan. 16 letter also acknowledge that an earlier legal opinion, OGC Op. 92-0232, has created confusion in its discussion of a particular loan product as a “hybrid or bifurcated loan.” It added that this new communication supersedes the older one, and is intended to clarify the agency’s interpretation regarding application of the Regulation Z definition of open-end credit in determining if a loan product is a line of credit for purposes of NCUA regulations. “Upon reconsideration, we believe OGC Op. 92-0232 is incorrect in concluding that a loan could be neither open-end credit nor closed-end credit; in the 15 years since it was issued, the opinion has created some confusion.” wrote Michael J. McKenna , NCUA deputy general counsel. “NCUA’s interpretation of Regulation Z, confirmed as correct by legal staff at the Federal Reserve Board), is that any extension of consumer credit is either open-end credit or closed-end credit. “Accordingly, an extension of consumer credit by an FCU meeting the Regulation Z definition of open-end credit is, for NCUA’s purposes, a line of credit and not subject to maturity limits. An extension of consumer credit by an FCU that does not meet the Regulation Z definition of open-end credit is, therefore, closed-end credit and subject to applicable maturity limits under the FCU Act and NCUA’s regulations,” the letter clarified. Use the resource link below for more on the NCUA letter.
Other Resources

RSS print
News Now LiveWire
Sept. #NCUABdMtg is adjourned.
50 minutes ago
.@TheNCUA : Positive TCCUSF net position does not mean that CUs will get a rebate. Final accounting likely in 2020 or 2021. #NCUABdMtg
54 minutes ago
No Stabilization Fund (TCCUSF) assessment in 2014. #NCUABdMtg
56 minutes ago
.@TheNCUA says TCCUSF repaid Treasury $300m during 2014 2Q #NCUABdMtg
56 minutes ago
First Service FCU charter change approved by NCUA. Next up: TCCUSF report.
1 hours ago