Current through Reg. 49, No. 38; September 20, 2024
(a) With approval of the Commissioner, a
credit union may initiate a program of purchasing loans or assuming an
assignment of deposits, shares, or liabilities from:
(1) Any credit union;
(2) Any other financial-type institution
(including depository institutions, mortgage banks, consumer finance companies,
insurance companies, loan brokers, and other loan sellers or liability
traders); or
(3) Any successor in
interest to any institution identified in subsection (a)(1) or (a)(2) of this
section.
(b) Commissioner
approval is not required for:
(1) Purchases of
student loans or real estate secured loans to facilitate the packaging of a
pool of loans to be sold or pledged on the secondary market under NCUA
regulations
RSA
701.23(b)(1)(iii) or (iv),
or purchases of member loans under §
RSA
91.711 of this title (relating to Purchase
and Sale of Member Loans);
(2)
Assumption of deposits, shares or liabilities as rollovers or transfers of
member retirement accounts or in which an insured credit union perfects a
security interest in connection with an extension of credit to any
member;
(3) Purchases of assets,
including loans, or assumptions of deposits, shares, or liabilities from any
deposit insured credit union, except a purchase or assumption as a part of a
merger under §
RSA
91.1003 of this title (relating to
Mergers/Consolidations); or
(4)
Purchases of loan participations as defined in and meeting the requirements of
§
RSA
91.805 of this title (related to Loan
Participation Investments).
(c) A credit union seeking approval under
subsection (a) of this section must submit a letter application to the
commissioner stating the nature of the transaction and describing the proposed
program. The application must include:
(1)
Copies of relevant transaction documents;
(2) The credit union board's resolution
approving the credit union to submit the application and engage in the proposed
activity;
(3) Evidence that the
credit union board has reviewed and approved the credit union's due diligence
efforts;
(4) Proposed policies
under which the program will operate, and which must comply with the
requirements outlined in §§91.802(b), 91.803 and 91.808 (relating to
Other Investments; Investment Limits and Prohibitions; and Loan Participation
Investments);
(5) Demonstrated
internal expertise to understand and mitigate the risks associated with the
activity proposed;
(6) Evidence of
requested approval by NCUA under NCUA regulations
RSA
741.8, if federally insured, or bond
covenants from American Share Insurance if necessary;
(7) Any other information relevant to the
transaction and the program; and
(8) Information requested by the Commissioner
or the Department.
(d) A
federally insured credit union purchasing assets or assuming liabilities of
another entity must also comply with applicable requirements contained within
the NCUA regulations 12 C.F.R. Part 741.
(e) A credit union shall submit the letter of
application as defined in subsection (c) of this section no later than 60 days
prior to the planned closing date of any program-related transaction(s). Late
applications may be considered when there are extenuating circumstances deemed
acceptable to the Commissioner. Final approval/disapproval shall be given in
writing by the Commissioner and shall include the basis for the
decision.
