Compliance Blog

Sep 14, 2015

NCUA Makes Technological Updates to Complaints Portal; NCUA Applies Broader Reading of Loan Participation Rule

Written by Victoria Daka, Regulatory Compliance Counsel

On September 10, 2015 the NCUA launched its improved online Consumer Assistance Center portal which creates a more streamlined process for complaint management. With the technological improvements in the portal, consumers are able to submit inquiries, complaints and additional documentation online through a secure portal. Additionally, they will also be able to check the status of their complaints online. NCUA indicates that in the upcoming weeks, credit unions will also be able to use the new Consumer Assistance Center portal to submit complaint response information securely and check the status and number of complaints concerning their institutions. However, the NCUA notes that the portal use is voluntary.

The technological ammendments in the complaints portal follow NCUA's Letter to Federally Insured Credit Unions issued in June of this year, indicating improvements to the complaint handling procedures. This Letter encompasses two distinct changes to the consumer complaint process, the appeals process and recommendations for credit unions to maintain effective procedures to process consumer complaints in house. For more information on NCUA's improved complaint handling process, see NAFCU's Compliance blog here.

To assist credit unions, NCUA intends to release a video explaining how to use the Consumer Assistance Center portal and the new resolution process. In addition, NCUA plans to host a webinar about the portal and other federal consumer financial protection matters in October.

The online Consumer Assistance Center portal is located on NCUA's consumer website,


NCUA Applies Broader Reading of Loan Participation Rule

In a recent Legal Opinion Letter, NCUA applies a broader reading of the loan participation rule with respect to the originating lender definition. NCUA indicates in the Letter that a federally insured credit union (FICU) or other eligible organization that is the seller of a participation, may be considered the originating lender where the seller has generated the loan by an indirect lending arrangement with a retailer.  Furthermore, NCUA ultimately indicates that a FICU is permitted under its loan participation rule to purchase a participation in a loan generated by an indirect lending arrangement. However, this is only permissible under limited circumstances.

NCUA specifies the limiting circumstances in two prongs. First, the retailer must be acting as an agent of the FICU or other eligible organization, and is simply performing as an administrative functionary processing a loan for an FICU or other eligible organization. Second, the retailer's activities must be part of, and an extension of, the FICU or other eligible organization's lending operations. In other words, the retailer is not acting like a separate lender generating loans for itself. Instead, the retailer is the facilitator of the FICU or other eligible organization's loan processing mechanism, and the FICU or other eligible organization is the de facto originating lender, and, therefore the originating lender for purposes of the loan participation rule.

The Legal Opinion Letter can be viewed in its entirety here.