As such, this final rule allows credit unions to capitalize on the benefits and opportunities provided by fintech firms."Ĭonducting appropriate due diligence on third parties is a long-standing expectation for all financial institutions, including credit unions. They also have more flexibility to transact with fintech companies and other institutions that offer services associated with the origination and sale of loans made to members of federal credit unions. "With the removal of limits on the purchases of eligible obligations and greater clarity on the qualifying criteria, federal credit unions can now purchase non-member loans from other credit unions. ![]() However, with greater freedom also comes greater responsibility. They can also bring in new sources of liquidity to the credit union system. As such, this final rule allows credit unions to capitalize on the benefits and opportunities provided by fintech firms.Ĭommenters correctly noted these changes to the NCUA’s regulations can create new and additional revenue streams. With the removal of limits on the purchases of eligible obligations and greater clarity on the qualifying criteria, federal credit unions can now purchase non-member loans from other credit unions. Specifically, the limits previously found in the NCUA’s regulations are replaced with policy, due diligence, and risk-management requirements that a credit union can tailor to match its risk levels and activities. With this final rule, the NCUA’s regulations related to loan participations and eligible obligations will shift from a prescriptive system to a principles-based structure. Thank you, all, for a job well done.Īs our presenters noted, the final rule before us today is largely unchanged from the proposal issued last December. I also want to share my appreciation with the teams in the offices of Examination and Insurance, General Counsel, and Fintech and Access who worked on this final rule on financial innovation, loan participations, and eligible obligations. ![]() Thank you, Naghi, Simon, and John, for your informative presentation. As Prepared for Delivery on September 21, 2023
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