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CUs: Offer feedback on NCUA's mortgage servicing proposal
NAFCU sent members a Regulatory Alert Tuesday detailing the NCUA's proposed rule to remove the current prohibition on federal credit unions’ ability to purchase mortgage servicing rights (MSRs) from the investment and deposit activities rule. A rule on MSRs was included in the agency's fall rulemaking agenda.
The proposed rule, amending parts 703 and 721 of the NCUA's regulations, would allow federal credit unions to purchase MSRs from other federally-insured credit unions as a permissible investment. However, in order for a federal credit union to purchase MSRs, the loan must be one that the federal credit union was empowered to grant, within the limitations of the board of directors’ written purchase policies, and there must be prior approval by the board of directors or investment committee.
In the Regulatory Alert, NAFCU highlighted that the proposal would offer:
- flexibility for federal credit unions to operate their mortgage servicing business in a way that fits their strategic objectives; and
- another avenue for federally insured credit unions to sell their MSRs.
NAFCU also noted that the flexibility to sell MSRs to a federal credit union could lead to a higher price while also keeping MSRs in the credit union system – maintaining safety and soundness provisions.
In addition, NAFCU posed several questions in the Regulatory Alert for credit unions to consider for feedback. Comments on the proposed rule are due to NAFCU Jan. 15; comments are due to the NCUA Feb. 1.
For more on the proposed changes, including an in-depth section-by-section analysis, view the Regulatory Alert; subscribe to receive Regulatory Alerts.