Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ALEXANDRIA, Va. — Those instances when banks and credit union can put aside their differences, meet in the middle and build connections are uncommon and kept relatively quiet, some would say.

That has certainly been the case in the loan participation arena. No one is quite sure how many arrangements are currently in place, but there are a few credit unions that have linked up with banks to buy and sell pieces of participation loans from each other. It’s permissible under NCUA’s rules and regulations for an FCU to “participate in making loans with eligible organizations,” which includes any federally chartered or federally insured financial institution, according to NCUA.

The caveat is the regulation limits participating FCU lenders that are not the originating lender to, among other things, participating only in “loans it is empowered to grant and loans to its own members or members of another participating credit union,” NCUA emphasized. Even if all legal requirements are met, loan participation programs are still subject to safety and soundness review by NCUA examiners.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.