COMMENT: NCUA Securitization of Loans (721, 741) - 60 days from publication
NCUA issues proposed rules permitting securitization of loans
The NCUA Board has issued a proposed rule which would allow qualified federal credit unions to securitize loans that they originate, so long as they meet certain conditions. These conditions include creating a separate, special purpose entity that holds the assets, have independent risk-management controls, and perform an annual independent audit. Additionally a credit union’s board would be required to have an adequate understanding of the securitization process, and senior management would be expected to have sufficient expertise of and oversee transactions. The credit union would also be required to have in place a board-approved securitization policy.
The rule would also apply to federally insured, state-chartered credit unions that are permitted by state law to securitize their assets.
A draft of the proposed rule (Parts 721 and 741) can be found on NCUA’s website; comments are due within 60 days of publication in the Federal Register, which is expected shortly.
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