Credit Unions Face Participation Rule Date
With the effective date of the revised loan participation rule less than one week away, credit unions and CUSOs have taken another look at their lending programs to see if any adjustments need to be made.
At its June 20 meeting, the NCUA Board approved several revisions to the rule, including limiting purchasing credit unions to a single-originator concentration of $5 million or 100% of net worth, whichever is greater.
“Our evaluation found no one has any significant or material concentration with one lender,” McCluskey said. “We try to get our lenders diversified. At this point, we’re in good shape.”
Of all the revised provisions, McCluskey said he especially favors some control on the lead lender’s exposure. His reasoning is led by what has occurred over the last several years when loan participants were overexposed because they didn’t have the necessary due diligence and factual support. Many lead lenders were participating but weren’t aware of over-exposure, he pointed out.