The NCUA Board approved a final rule in June to revise its loan participation rules (Parts 701 and 741).
The rule applies to all federally insured credit unions that purchase loan participations originated by credit unions or other eligible organizations.
The rule’s original effective date was July 25. But at CUNA’s urging, the agency extended the effective date to Sept. 23 to give credit unions additional time to comply.
The “new rule is intended to minimize losses to the system by requiring purchasers to carefully evaluate all participations and their originators,” says NCUA Board Chairman Debbie Matz.
Under the rule: