The NCUA Board proposed new rules Thursday that would give credit unions greater parity with banks when it comes to securitizing assets.
One proposal clarifies that federally insured credit unions are authorized to securitize loans they have originated. A second proposed rule would retain the safe harbor for financial assets transferred in connection with securitizations.
"With the securitization rule we're permitting certain credit unions under certain circumstances to securitize the loans on their books, but in order for them to be marketable, we needed to propose a safe harbor provision, which indicates if the credit union that securitized the loans is liquidated or conserved the investors would not lose their money," Matz said during a video interview immediately following the board meeting. "So it was really important – it matches the way the FDIC treats securitizations with banks."
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