Purchase, sale, and pledge of eligible obligations.

CFR · 2024-01-01 · US · Title 12

This section governs a Federal credit union's purchase, sale, or pledge of all or part of a loan to one of its own members, subject to certain exceptions. For purchases of eligible obligations, except as otherwise described under paragraph (b) of this section, the borrower must be a member of the purchasing Federal credit union before the purchase is made. (a) (i) In the case of a voluntary liquidation, a credit union is a liquidating credit union as of the date the members vote to approve liquidation. (ii) In the case of an involuntary liquidation, a credit union is a liquidating credit union as of the date the board of directors is served an order of liquidation issued by either the NCUA or the state supervisory authority. (b) (i) (ii) (iii) (iv) (2) (i) (A) Loans the purchasing credit union is empowered to grant; or (B) Loans refinanced with the consent of the borrowers, within 60 days after they are purchased, so that they are loans the purchasing credit union is empowered to grant; (ii) (iii) (iv) (3) (i) The board of directors or investment committee approves the purchase; (ii) A written agreement and a schedule of the eligible obligations covered by the agreement are retained by the purchaser; and (iii) For purchases under paragraph (b)(1)(ii) of this section, any advance written approval required by § 741.8 of this chapter is obtained before consummation of such purchase. (4) (5) (6) (i) Require that the purchasing Federal credit union conduct due diligence on the sel

official document · source cfr-2024 · id 12:§ 701.23