Feb. 23 is the public comment deadline on a proposed rule to permit more flexibility for credit unions to use “advanced technologies and opportunities” in lending that is offered through financial technology (fintech) firms, according to a notice Friday in the Federal Register.
The proposal, issued unanimously Dec. 15 by the three-member National Credit Union Administration (NCUA) Board, would amend the agency’s rules about purchase of loan participations and the purchase, sale, and pledge of eligible obligations and other loans (including notes of liquidating credit unions). The proposed rule would, among other things, also add new provisions about indirect lending and indirect leasing arrangements to credit union members.
The NCUA said the proposed rule would clarify that a federally insured credit union (FICU) engaged in an indirect lending relationship can meet the definition of “eligible organization” under NCUA regulations if it meets certain conditions. Among them is that a FICU would be considered the originating lender and meet the definition of an “eligible organization” if the FICU makes the final underwriting decision regarding the loan, and the loan is assigned to the purchaser very soon after the inception of the obligation to extend credit.