Federal credit unions can use a fully automated loan approvalprocess but should be careful that it has safeguards to ensure thatit doesn't raise safety and soundness concerns, according to alegal opinion letter by NCUA Associate General Counsel HattieUlan.
|She said a major concern for the agency is that because underthe automated system a human audit of the application and loansonly occurs the funds have been disbursed.
|Ulan also expressed concern, however, about allowing federalcredit unions to use the automated system for new membershipapplications, especially if they run a credit check on potentialapplicants.
|Ulan said that “the rationale for limiting online applicants topersons who agree to a credit report check is not apparent.”
|She also cautioned that credit union employee who enters a loanapplicant's data into an automated system can't act as both theloan officer and the person who disburses the money.
|Ulan responded to an inquiry from Oklahoma City lawyer Laura N.Pringle.
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