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NAFCU Regulatory Affairs Counsel Ann Kossachev on Tuesday urged the NCUA to update credit unions on the status of the agency's NAFCU-backed asset securitization proposed rule and requested a meeting to discuss how the proposal can further address the industry's needs.

Kossachev, noting the "financial landscape has changed quite a bit" since the proposed rule's issuance in 2014, emphasized that the rule would be helpful to credit unions now. She noted the rule would give credit unions the opportunity to develop alternative sources of funding to reduce their reliance on government-sponsored enterprises like Fannie Mae and Freddie Mac.

In her letter, Kossachev highlighted several of NAFCU's recommended changes to the existing proposal, including:

• expand the eligibility of loans beyond those originated by the securitizing credit union;
• provide flexibility in the levels of residual and retained interests in securitized assets a credit union may hold;
• authorize credit unions to have special-purpose vehicles to enter into derivative transactions; and
• provide additional clarifications on the types of securitization transactions in which credit unions may engage.

"In addition, NAFCU strongly urges the NCUA to evaluate the accessibility of the proposed asset securitization mechanism for credit unions of all sizes," Kossachev wrote. "Smaller credit unions may not have the capacity to originate as many loans as are currently envisioned to be able to participate in a securitization program."

The NCUA included the asset securitization rule in its fall rulemaking agenda in November. In her letter, Kossachev expressed NAFCU's hope for further progress on the proposal in the coming months.