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NORWALK, Conn.-CUNA and NCUA explained credit unions’ plight under the Financial Accounting Standards Board’s proposed guidance on loan participations. Under the proposal, known as Financial Accounting Statement 140, loan participations would be treated as secured borrowing rather than a sale as it is currently treated, which would leave the loan on the originating credit union’s books. “This is a really big deal for credit unions.” CUNA Associate General Counsel Mary Dunn said. “This could be a problem because it wouldn’t allow participations to be excluded from the 12.25% assets limitation (for member business loans).” Steven Bisker, a Virginia attorney specializing in credit union issues that CUNA keeps on retainer, and NCUA Attorneys Paul Peterson and Karen Kelbly participated in the roundtable on behalf of credit unions. FASB has expressed concerns that the originating credit union could still claim the loan participation in liquidation under the current method. “We think we got a little traction in our comments on Thursday,” Dunn said.

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