Credit Unions Say Prohibition on Purchased Loans Renders NCUA Securitization Proposal Inadequate
September 5, 2014
A proposal from the National Credit Union Administration to permit covered credit unions to securitize loans they have originated – but not purchased – is widely seen as insufficient by the credit union industry because of that limitation. That’s likely to prompt the regulator to favorably revise the proposal in the coming months, industry analysts say. Back in June, the NCUA issued a proposal to authorize loan securitizations by credit unions, but only for loans originated, not purchased. It also proposed permitting the creation of special purpose vehicles (SPV) to hold the assets collateralizing the securities. Additionally, the proposal lists a number of minimum requirements and limitations on residuals and retained interests. The Credit Union National Association, in its comment letter to the agency, indicated...