ALEXANDRIA, Va. (7/8/13)--There is now a new, later effective day for the National Credit Union Administration's final rule on loan participations: Sept. 23. The Credit Union National Association strongly urged the agency to address the effective date to give credit unions flexibility to adequately prepare for the rule's changes. The original effective date was July 25.
"NCUA's effective date change and the numerous key changes in the final rule are important indications that the board is responding to reasonable concerns without sacrificing safety and soundness, which is a commendable approach to regulation," CUNA Deputy General Counsel Mary Dunn noted when the effective date change was announced Wednesday.
The NCUA approved the loan participation rule at last month's open board meeting. The final features many improvements suggested by CUNA even though CUNA did not support any new loan participation rule at this time.
The rule sets a limit on loans from one originator of 100% of a credit union's net worth; and provides an expanded waiver process for the single-originator limit and limits to one borrower.
The NCUA also approved a provision so that credit unions pushed over the limit by new rule can move their loans into line: such credit unions would not have to sell loans immediately to come into compliance but can bring their participation activity into line in the ordinary course of business or seek a waiver.
For more on the loan participations rule, use the resource link.