Or. Admin. R. 441-720-0210

Current through Register Vol. 63, No. 9, September 1, 2024

Section 441-720-0210 - Adoption of Federal Regulations Concerning Purchase, Sale and Pledge of Eligible Obligations

(1) A credit union may purchase, in whole or in part, within the limitations of the board of directors' written purchase policies:

(a) Eligible obligations of its members, from any source, if either:

(A) They are loans it is empowered to grant; or

(B) They are refinanced with the consent of the borrowers, within 60 days after they are purchased, so that they are loans it is empowered to grant.

(b) Eligible obligations of a liquidating credit union's individual members, from the liquidating credit union;

(c) Student loans, from any source, if the purchaser is granting student loans on an ongoing basis and if the purchase will facilitate the purchasing credit union's packaging of a pool of such loans to be sold or pledged on the secondary market; and

(d) Real estate-secured loans, from any source, if the purchaser is granting real estate secured loans on an ongoing basis and if the purchase will facilitate the purchasing credit union's packaging of a pool of such loans to be sold or pledged on the secondary mortgage market. A pool must include a substantial portion of the credit union's members' loans and must be sold promptly.

(2) A credit union may make purchases in accordance with section (1) of this rule provided:

(a) The board of directors or investment committee approves the purchase;

(b) A written agreement and a schedule of the eligible obligations covered by the agreement are retained in the credit union's office; and

(c) For purchases from a liquidating credit union, any advance written approval required from the director is obtained before consummation of such purchase.

(3) The aggregate of the unpaid balance of eligible obligations purchased under paragraph (a)(A) and subsection (b) of section (1) of this rule may not exceed 5% of the paid-in and unimpaired capital and surplus of the credit union. In calculating this 5% limitation, the credit union can exclude an indirect lending or indirect leasing arrangement that is classified as a loan and not the purchase of an eligible obligation because the credit union makes the final underwriting decision and the sales or lease contract is assigned to the credit union promptly after it is signed by the member and the dealer or leasing company.

(4) A credit union may sell, in whole or in part, to any source, eligible obligations of its members, and obligations and loans purchased in accordance with subsections (b), (c) and (d) of section (1) of this rule, within the limitations of the board of directors' written sale policies, provided:

(a) The board of directors or investment committee approves the sale; and

(b) A written agreement and a schedule of the eligible obligations covered by the agreement are retained in the credit union's office.

(5) A credit union may pledge, in whole or in part, to any source, eligible obligations of its members, and obligations and loans purchased in accordance with subsections (b), (c) and (d) of section (1) of this rule, within the limitations of the board of directors' written pledge policies, provided:

(a) The board of directors or investment committee approves the pledge;

(b) Copies of the original loan documents are retained; and

(c) A written agreement covering the pledging arrangement and identifying the eligible obligations is retained in the credit union's office.

(6) A credit union may agree to service any eligible obligation it purchases or sells in whole or in part.

(7) The total indebtedness owing to any credit union by any person, inclusive of retained and reacquired interests, shall not exceed the loan limit described in ORS 723.512.

Or. Admin. R. 441-720-0210

FCS 2-2005, f. & cert. ef. 8-25-05

Stat. Auth.: ORS 723.102

Stats. Implemented: ORS 723.156, 723.512, 723.526 & 723.602