ALEXANDRIA, Va. — Recognizing a rise in loan participation activity and their related losses and delinquencies this year, NCUA has provided a 12-page refresher guide for credit unions.

In the guide, NCUA reminded credit unions to apply the same principles they would to evaluating third-party relationships as they would with loan participations. The guidance also describes practices examiners will find in a "well-run" loan participation program involving any type of loans, including automobiles, residential mortgages, and member business loans.

According to NCUA, outstanding loan participations increased 262% between 2003 and 2008, compared to a 149% increase in total loans. Annualized total dollars of loan participations charged off in 2008 were twice 2006 levels, resulting in the charge-off ratio increasing from 0.41% in 2006 to 0.64% in 2008. The charge-off ratio for total loans increased from 0.46% in 2006 to 0.75% in 2008. Loan participation delinquency was 1.10% in 2006 and 2.27% in 2008. Total loan delinquency was 0.68% in 2006 and 1.13% in 2008.