ARLINGTON, Va. – A loan officer at a federal credit union can obtain information from a loan applicant, obtain a credit report, and enter the data into an automated underwriting system, but he or she cannot disburse the funds once the system approves the application, a recent NCUA legal opinion said. In an April 17 letter from associate general counsel Sheila Albin to Ent Federal Credit Union, based in Colorado Springs, Colorado, Albin said that in the agency’s interpretation of the Federal Credit Union Act (FCUA) “an employee entering data into an automated underwriting system is responsible for the accuracy of the data and proper use of the system” and was thus a loan officer. The FCUA holds that “No individual shall have authority to disburse funds of the Federal credit union with respect to any loan or line of credit for which the application has been approved by him in his capacity as a loan officer,” Albin wrote, adding that this was so to reduce the incidence of fraud, embezzlement and errors. An automated underwriting system is not a substitute for a loan officer, Albin wrote.

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