Federal credit unions can sell their loans to mutual funds, with certain restrictions, the NCUA said in a legal opinion letter.
NCUA Associate General Counsel Hattie Ulan wrote that the sales must be in accordance with the credit union board’s written sales policy and must be approved by the credit union’s board or investment committee.
Also, the credit union must keep a copy of the agreement and a schedule of eligible obligations.
Ulan wrote the opinion in response to attorney Guy Messick of Media, Pa., general counsel for NACUSO, who specifically asked whether federal credit unions can sell loans to registered mutual funds.
