Loan participation rule detailed in NAFCU webcast
Sept. 5, 2013 – Credit unions learned what examiners will be looking for when they evaluate federal credit unions’ loan participation activity in a NAFCU webcast Wednesday featuring Brian Lauer, partner at Messick & Lauer P.C.
“The most important thing from an examination perspective that credit unions should know about loan participation is that – first of all – they’re under the spotlight,” Lauer emphasized in the webcast, which focused on NCUA loan participation rule changes that kick in Sept. 23. He said regulators’ concerns about loan participations stem from the financial crisis and the perception of too much reliance on originating lenders.
He advised, “Make sure you have all of your t’s crossed and i’s dotted, that you have all of the things the new rule requires in place . . . and that you have the ability to monitor the loans you’re buying.”
In the webcast, which was moderated by NAFCU Regulatory Affairs Counsel PJ Hoffman, Lauer discussed federal credit union seller and buyer limitations, what an “associated borrower” is, and clarified changes to the rule, which has been revised in multiple ways. Lauer also went over risk retention requirements, underwriting changes and requirements for purchaser loan participation policy.
The webcast will be available on demand on NAFCU’s website for one year.