ARLINGTON, Va. - NASCUS has submitted a five-point list of issues to NCUA in response to the agency's proposed rule 12 CFR Part 709 regarding NCUA's "involuntary liquidation of federal credit unions and adjudication of creditor claims involving federally-insured credit unions in liquidation." Topping the list of issues discussed in NASCUS' comment letter, NASCUS recommends NCUA expand the definition of "lawful collaterization." In the explanation of the proposed rule, NCUA refers to an "enforceable and perfected security interest in collateral. NASCUS says that "this implied definition is unnecessarily restrictive." The association recommends the definition should "consider varying approaches to security interests among the various states" to reflect state laws, rules and regulations. "Limiting the definition of `lawful collaterization' may restrict some states in their ability to deposit public funds in credit unions. Such a result would defeat the remedy this rule proposes to offer," NASCUS wrote.
NASCUS urges NCUA to expand "lawful collaterization" definition
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