League Supports NCUA's 'Financial Innovation' Rule; Salutes Board's Approach to Flexible, Principles-Based Regulation

The National Credit Union Administration Board unanimously approved a final rule that amends the NCUA’s regulations regarding indirect lending, the purchase of loan participations, and the purchase, sale, and pledge of eligible obligations and notes of liquidating credit unions.

The final rule clarifies the NCUA’s current regulations and provides flexibility for federally insured credit unions to take advantage of advanced technologies and opportunities offered by the financial technology sector.

“We appreciate the NCUA Board’s commitment to providing regulatory clarity and fostering opportunities for credit unions by allowing them to leverage partnerships and marketplace innovation,” said Virginia Credit Union League Chief Advocacy Officer JT Blau. “We are also supportive of NCUA’s approach in this rule of moving away from prescriptive regulation to a principles-based approach. This rule empowers credit union management and provides the flexibility they need to do what they do best -- manage their balance sheets and serve the needs of their members.”

NCUA notes the 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.

Learn more