NCUA issues guidance on loan participation waivers
Sept. 20, 2013 – NCUA on Thursday released some long-awaited supervisory guidance on loan participation waivers under a final rule that is set to take effect Sept. 23.
“We are glad the NCUA released guidance, but we had hoped for credit unions’ sake that it would be out earlier so they’d have more time to digest this revised rule,” said NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt.
Given the delay in the waiver guidance, NAFCU wrote NCUA Tuesday asking that the rule’s Sept. 23 effective date be delayed.
NCUA’s supervisory guidance is included as an attachment to Letter to Credit Unions 13-CU-07, which was released Thursday. As explained in the guidance, the rule provides for two types of waivers that can be obtained by the originating lender and passed through to participating credit unions:
- one-time waivers, which are designed to meet a specific need of an individual or small set of borrowers; and
- blanket waivers, which give the credit union authority to conduct lending activities at limits above those established in the regulation.
NCUA added in its guidance document that it “will typically only grant loan participation waivers to healthy, well-run credit unions that have sound lending programs.”
The guidance also explains what information credit unions must include in their waiver requests. Once the application for a waiver is filed, NCUA has 45 days to respond to the request.
NAFCU Final Regulation (members only)
NAFCU letter to NCUA
NCUA Letter to Credit Unions 13-CU-07