National Credit Union Administration June 26, 2014 – Federal Register Recent Federal Regulation Documents

The NCUA Board (Board) proposes to amend its regulations to clarify that a natural person federal credit union (FCU) is authorized to securitize loans that it has originated, as an activity incidental to the business for which an FCU is chartered, provided the transaction meets certain requirements. The proposed rule would also apply those requirements to federally insured, state-chartered credit unions (FISCUs) that are permitted by state law to securitize their assets.

As part of NCUA's Regulatory Modernization Initiative, the NCUA Board (Board) is proposing to revise two of NCUA's regulations regarding appraisals. Firstly, the Board is proposing to amend NCUA's regulations to eliminate the now duplicative requirement that federal credit unions (FCUs) make available, to any requesting member/ applicant, a copy of the appraisal used in connection with that member's application for a loan secured by a first lien on a dwelling. A recent amendment to the Consumer Financial Protection Bureau's (CFPB) Regulation B requires that all creditors, including FCUs, now automatically provide applicants with free copies of all appraisals and other written valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling. Secondly, the proposed rule would amend NCUA's appraisal regulations by expanding the current exemption for certain transactions involving an existing extension of credit. Under the expanded exemption, federally insured credit unions (FICUs) would be able to refinance or modify a real estate-related loan held by the FICU, without having to obtain an appraisal, if there is no advancement of new monies or if there is adequate collateral protection, even with the advancement of new monies. The proposal would also make a minor technical amendment to the definition of the term ``application.'' These changes will modernize NCUA's regulations by better aligning them with the modern marketplace, while also reducing costs for FICUs and their members, and removing outdated regulatory requirements.