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updated 08/18/14 04:19 PM
California Credit Union Participation
Since its launch a few months ago, Catalyst Corporate FCU’s loan participation program has helped nearly two dozen credit unions—including California credit unions—sell and buy more than $46 million in loans.

How it works: Catalyst Corporate FCU works with sellers to identify and assemble loan pools, which are comprised of auto loans and mortgages, and develop pricing. Once a participation package has been assembled, Catalyst Corporate FCU staff outlines the offer for sale, locates buyers, and gathers and provides the due diligence information on a secure website for buyers to review. Catalyst Corporate FCU then coordinates the processing of documents between sellers and buyers, processes the settlement transaction, and provides monthly reporting and remittance services.

Foothill FCU located in Arcadia, CA is one credit union that has assembled a loan package. Auto loans purchased through Catalyst Corporate FCU’s loan participation program helped mitigate a loan portfolio stacked with real estate and business loans that Foothill FCU acquired from other credit unions and the Credit Union Business Group (CUBG)—helping the credit union diversify.

“We’ve been buying loans to help meet the growth outlined in our strategic plan,” said Jackie So, vice president of Finance at Foothill FCU.

Catalyst Corporate FCU began developing its new loan participation program in 2013, following the National Credit Union Administration’s issuance of final rules which detailed more precisely what credit unions can and cannot do when sharing loans.

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