NCUA Board Delays Loan Participation Rule Compliance Date
The NCUA announced Wednesday that Chairman Debbie Matz and Board Member Michael Fryzel have agreed to extend the effective date of the agency's final loan participation rule to Sept. 23.
The original date was July 25.
In a release, the regulator said the board decided to extend the date because some credit unions faced difficulties implementing the new rule by the compliance deadline.
Approved by the board during its June 20 monthly meeting, the rule caps participation loan originations from a single lender to 100% of net worth or $5 million, whichever amount is greater.
Other requirements include a provision that requires purchasers to develop a loan origination policy, requires a written agreement between originators and borrowers, and requires originating lenders that are federal credit unions to retain at least 10% of the loan.
The NCUA said it will issue guidance to credit unions prior to Sept. 23.