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![]() ![]() In this case you would report this as a participation purchased. The originating credit union would be maintaining a 10% interest in that loan through the loan's life and the originating credit union is going to be servicing that loan. As an example, let's assume that your credit union purchased a 90% participation interest in a loan. Section 701.22 of the NCUA regulations also outline some additional seller retention requirements and minimum requirements for a participation agreement. In general, participations would only apply to the purchase of a loan from the originator where there's a continuing contractual obligation between the purchaser and seller. ![]() There's additional nuance to this and I would refer you to the Call Report Instructions and the NCUA regulations. Yes, we have received a number of questions on loans purchased under section 701.22 and 701.23. Additionally, loan fees, certain direct loan origination costs, and purchase premiums and discounts on loans should be recognized as an adjustment to yield based on the contractual terms of the loan. Loans should be reported net of loan origination fees/costs which shall be recognized over the life of the related loan as a yield adjustment. ![]() ![]() For each loan category, report only loans that have an outstanding balance. The instructions for Schedule A, Section 1 provide clarification. If loans in process are appropriately reported in the Statement of Financial Condition then they should be included in Schedule A, Sections 1 and 7. The balances reported in Accounts 703A, 386A, and 386B on Schedule A, Section 1, must agree to the amounts reported in Accounts RL0016, RL0017, RL0030, RL0031, RL0044 and RL0045 on Schedule A, Section 7. The balances reported in Accounts 025A1 and 025B1 on Schedule A, Section 1 must agree to the amounts reported in Accounts 025A and 025B on the Statement of Financial Condition. ![]()
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