ALEXANDRIA, Va.-In a recent legal opinion letter, NCUA gave First Choice Credit Union the green light to purchase a participation interest in a commercial loan issued by another credit union. First Choice originally consulted the state regulator, which advised the credit union to seek NCUA counsel. The state regulator was initially concerned that, while First Choice has an appropriate policy in place, the credit union itself had never granted a business loan before. However, NCUA Associate General Counsel Sheila Albin wrote, "Assuming First Choice CU meets all other requirements of NCUA's regulations, we see no legal impediment to its purchase of the participation interest in a commercial loan." So long as the participation interest is consistent with the credit union's policy, there is no violation of NCUA regulations.
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