A proposed rule issued Aug. 2 on credit union loan maturities and limits on loans to one borrower is slated for publication Friday in the Federal Register. The proposal was issued with a 60-day comment period, expected to close Oct. 9.
The proposed rule by the National Credit Union Administration (NCUA) is aimed at making the rule clearer and easing compliance. The proposal:
- identifies all the various maturity limits set for federal credit union loans in one section of the rule;
- explicitly states that the maturity date for a “new loan” under generally accepted accounting principles (GAAP) is calculated from the new date of origination;
- seeks comment on whether the agency should provide longer maturity limits for 1-to-4 family real estate loans and other loans permitted by the Federal Credit Union Act (FCU Act) such as home improvement, mobile home, and second mortgage loans; and
- seeks comments on proposed clarifications regarding limits on loans by federally insured (including state-chartered) credit union loans to a single borrower or group of associated borrowers; and on whether there should be a universal standard limit instead of current product-specific limits (specifically, regarding commercial loans and loan participations).
Proposed Rule: Loans to Members and Lines of Credit to Members (Federal Register notice)