Purchase of Eligible Obligations

HAS THE NCUA ISSUED TEMPORARY RELIEF RELATED TO THE PURCHASE OF ELIGIBLE OBLIGATIONS DURING THE COVID-19 PANDEMIC?

The NCUA Board approved an interim final rule in April that temporarily suspends limits on the types of eligible obligations that a federal credit union may purchase and hold. Under the rule, a federal credit union no longer has to refinance a purchased obligation so that it matches the types of loans the credit union is allowed to make. Loans purchased under this authority will not count against the limit of 5 percent of the unimpaired capital and surplus of the purchaser.

In addition, the interim final rule allows an FCU with a composite CAMEL rating of “3” to purchase eligible obligations of any FICU or liquidating credit union without regard to whether they are obligations of the purchasing FCU’s members. (This was previously limited to FCUs with a composite CAMEL rating of “1” or “2”.)

This relief will remain in place until Dec. 31, 2020. See Letter to Credit Unions 20-CU-09.