Financial Innovation: Loan Participations, Eligible Obligations, and Notes of Liquidating Credit Unions

The NCUA Board (Board) is amending the NCUA’s regulations regarding the purchase of loan participations and the purchase, sale, and pledge of eligible obligations and other loans (including notes of liquidating credit unions). The final rule clarifies the NCUA’s current regulations and provides additional flexibility for federally insured credit unions (FICUs) to make use of advanced technologies and opportunities offered by the financial technology (fintech) sector. The final rule also amends the NCUA’s rule regarding loans to members and lines of credit to members by adding new provisions about indirect lending arrangements and indirect leasing arrangements. Finally, the final rule makes certain conforming changes and technical amendments to the NCUA’s regulations. The Board does not view the conforming changes and technical amendments as substantive.