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NAFCU issues Final Reg on NCUA’s mortgage servicing assets rule
NAFCU Tuesday sent a Final Regulation Alert to members breaking down the NCUA’s final rule on mortgage servicing assets (MSA) – formerly known as mortgage servicing rights. The association's Final Regulation Alerts are member-only resources that feature full text and easy to read summaries for final rulemakings affecting credit unions.
Through the Final Regulation, NAFCU notes that the NCUA’s final rule amends part 703 and 721 of its regulations regarding MSAs and removes the current defined term “mortgage servicing rights” in the investment rule, replacing it with the term “mortgage servicing assets.”
In addition, the association noted that under the final rule, federal credit unions with a CAMEL or CAMELS composite rating of 1 or 2 and a Management component rating of 1 or 2 may purchase the MSAs of loans from other federally-insured credit unions that:
- the FCU is empowered to grant;
- if the purchase is made in accordance with the FCU’s policies and procedures to address risk; and
- if the FCU’s board of directors approves the purchase in advance.
The rule will become effective April 1. For detailed background information of the finalized rule, including a section-by-section analysis, view the Final Regulation.