| (a) A credit union may purchase a participation interest
in a loan, where the borrower is neither a member of the credit union
or a member of another participating credit union, as permitted by §124.351(a)(8)
of the Texas Finance Code, provided the following conditions are satisfied:
(1) the purchase complies with all regulatory requirements
to the same extent as if the credit union had originated the loan;
(2) the originating lender retains at least 10 percent
of the outstanding balance of the loan through the life of the loan;
(3) the purchase complies with the credit union's investment
policy, which, at a minimum, must:
(A) establish the same degree of independent credit
and collateral analysis as if the credit union was the originator;
and
(B) establish commitment limits for aggregate purchased
participations, out-of-area participations, and loans originated by
individual lead institutions.
(4) the written loan participation agreement fully
describes the lead institution's responsibilities, establishes requirements
for obtaining timely borrower credit information, addresses remedies
upon default, and outlines dispute resolution procedures.
(b) Financial Reporting. A participation interest in
a non-credit union member loan purchased under this section shall
be reported in accordance with generally accepted accounting principles.
(c) Other Requirements. A credit union purchasing a
loan participation investment must also comply with applicable requirements
contained within Part 741 of the National Credit Union Administration
Rules and Regulations.
|
| Source Note: The provisions of this §91.805 adopted to be effective August 14, 2000, 25 TexReg 7636; amended to be effective November 11, 2007, 32 TexReg 7923; amended to be effective November 13, 2011, 36 TexReg 7544; amended to be effective November 8, 2015, 40 TexReg 7665 |
