Trades Strongly Support Loan Participation Changes

ALEXANDRIA, Va.-CUNA and NAFCU patted NCUA on the back for the agency’s proposed amendments to the definitions of “credit union organization,” to conform to the credit union services organizations rule, and “financial organization,” including federal and state government entities in this definition. The proposed rule clarified that CUSOs that primarily provide credit union member services are permitted to be involved in loan participations. In NAFCU’s Sept. 2 comment letter, President and CEO Fred Becker wrote, “Going forward, credit unions may now be certain that CUSOs are eligible loan participation partners as they seek to manage liquidity and concentration risk.” CUNA also used the opportunity to comment on loan participation provisions in the upcoming final decision on the member business loan rule for the board’s September meeting. CUNA urged NCUA to “retain the member business loan proposal in the final rule to the extent possible, as outlined in our June 3, 2003 comment letter, including the provisions regarding loan participations.”