TO: NCUA Board
FROM: Office of Examination and Insurance and Office of General Counsel, Kelly Lay
DATE: December 13, 2022
SUBJ: Financial Innovation: Loan Participations, Eligible Obligations, and Notes of Liquidating Credit Unions – Proposed Rule, Parts 701 and 714
ACTION ITEM: The NCUA Board’s approval of a proposed rule to amend the NCUA’s rules relating to loan participations and eligible obligations.
DATE ACTION REQUESTED: December 15, 2022.
OTHER OFFICES CONSULTED: OCFP, ONES, Regional Offices.
VIEWS OF OTHER OFFICES CONSULTED: Input was incorporated into the draft as appropriate.
BUDGET IMPACT, IF ANY: None.
SUBMITTED TO INSPECTOR GENERAL FOR REVIEW: Yes.
RESPONSIBLE STAFF MEMBERS: Laura Smith, Senior Credit Specialist, or Naghi Khaled, Director of Credit Markets, Office of Examination and Insurance and Frank Kressman, General Counsel, the Office of General Counsel.
SUMMARY: The proposed rule would amend the NCUA’s rules regarding the purchase of loan participations and the purchase, sale, and pledge of eligible obligations and other loans (including notes of liquidating credit unions). The proposed rule is intended to clarify the NCUA’s current regulations and provide additional flexibility for federally insured credit unions to make use of advanced technologies and opportunities offered by the financial technology sector. The proposal would also make conforming amendments to the NCUA’s rule regarding loans to members and lines of credit to members by adding new provisions regarding indirect lending arrangements and indirect leasing arrangements. Finally, the proposal would make other conforming changes and technical amendments in other sections of the NCUA’s regulations.
ACTION ITEM: NCUA Board approval of the attached proposed rule with a 60-day comment period.
ATTACHMENT: Proposed rule.