Eighteen months after it proposed a controversial loan participation rule that would have capped purchases from single originators to just 25% of net worth, the NCUA Board approved a final rule June 20 that significantly relaxed the provision.
That concentration limit was increased significantly in the final rule, to 100% of net worth or $5 million, whichever is greater.
"We heard loud and clear that the proposed concentration limit of 25% of net worth from a single originator was too low," Chairman Debbie Matz said during the meeting at the NCUA's Alexandria, Va. headquarters. "It would have had the unintended consequence of restricting small credit unions that need to diversify from purchasing participations."
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