ALEXANDRIA, Va. – NCUA said a federal credit union may not service or collect on loans for non-members, either directly or through a CUSO.
"As part of granting loans, FCUs engage in loan servicing and collection services, and we conclude FCUs can provide loan servicing and collection services as a financial service but only to members," NCUA said in a recent legal opinion issued to Government of Guam Employees FCU.
The credit union is trying to help Habitat for Humanity Guam and hoped to record loans the non-profit group makes on its mortgage loan system as off balance sheet loans, collect loan payments, provide notices for past due accounts, and handle collections on behalf of the group, which is not a member of the credit union.
The best way to deal with the issue, said NCUA, is to have the local Habitat group join the credit union. "Thus, if HHG is eligible for membership, we recommend it join and Employees FCU would be able to assist it with its lending program," said the credit union agency.
"If HHG is not eligible for membership, we suggest Employees FCU consider providing the services to HHG as an in-kind, charitable contribution or donation," said NCUA. "Under the charitable contributions rule, FCUs can make charitable contributions to nonprofit recipients, regardless of membership, that are located or conduct activities in a community in which the FCU has a place of business."
