Rules On Secondary Mkt. Sales Delayed 2 Months
WASHINGTON-Financial regulators agreed to postpone for two months final rules requiring financial institutions that package loans and sell them on the secondary market to hold some of the risk on their books-that is, retain some "skin in the game."
Regulators have been receiving numerous complaints from both lenders and borrowers that the proposal will cut off credit to lower-income people who may not have as much of their own skin in the game. That's because the proposal would require FIs to retain at least 5% of mortgages they sell on the secondary market unless the mortgages meet strict qualifications as qualified residential mortgages, such as a 20% down payment.
The rule is aimed at ensuring lenders who sell loans on the secondary market retain some type of financial incentive to make good loans. Critics said the originator of the loan or the firm creating the security had little stake in whether the loan performed because it was being sold to investors.
The rule will have a profound effect on CUs, even though NCUA is not writing its own version. The Office of the Comptroller of the Currency, Federal Reserve, the FDIC, Securities and Exchange Commission, Federal Housing Finance Agency and Department of Housing and Urban Development are coordinating on a joint rule, meaning anyone who plays in the secondary mortgage market will have to comply.
CEO Ron Lasich Dies
BRIDGEVILLE, Penn.-Ron Lasich, 66, president/CEO of Visionary FCU and a former chairman of the Pennsylvania CU Association, has died. Mr. Lashich was also very involved in the Pittsburgh Chapter of CUs and was inducted into the Credit Union House Hall of Leaders in 2009.
Credit Union Journal is inviting entries for its 2011 Best Practices Awards, which, as always are easy to enter, and free! For information in entering, visit www.cujournal.com. Winners will be recognized in a special November issue.