The NCUA recently approved a final rule on financial innovation that clarifies the current regulations and provides flexibility for federally insured credit unions to take advantage of advanced technologies and opportunities offered by the financial technology sector.
The final rule codifies several long-standing supervisory guidance letters on third-party due diligence, indirect lending, and loan participations, and shifts the regulatory framework from a prescriptive structure to a principles-based system. In addition, the final rule relocates and clarifies the NCUA’s provisions regarding indirect lending and indirect leasing; provides credit unions with additional flexibility to participate in loans acquired through indirect lending arrangements, allowing federally insured credit unions to use advanced technologies and opportunities offered by the fintech sector; removes certain restrictions and other qualifying requirements relating to eligible obligations and provides credit unions with additional flexibility to purchase eligible obligations of their members.
With the adoption of the final rule, the limits previously found in the regulations are replaced with policy, due diligence, and risk-management requirements that can be tailored to match each credit union’s risk levels and activities.
For further information about items in this L & T Bulletin, please contact ICUL’s Compliance & Advocacy Office:
| Joni Senkpeil | [email protected] | 630-983-2723 |
| Kari Osier | [email protected] | 630-983-3412 |
| Shannon Basile | [email protected] | 630-983-3407 |
| Ashley Sharp | [email protected] | 217-744-1803 |
| Patrick Smith | [email protected] | 217-744-1802 |
| Stephen R Olson | [email protected] | 630-712-9378 |