Home Sections News Research Careers Blog Directory Web Seminars Calendar Subscriptions
NCUA Warns CUs About Perils of Indirect Lending 8/18/2010
By David Morrison
The NCUA wants credit unions to exercise significant care when making loans in partnership with third party vendors or organizations.
“NCUA examiners are reviewing Call Reports for increasing amounts of repossessed autos or increasing indirect lending delinquency and loan losses,” the agency wrote in an August letter to credit unions on the topic. “In addition to those obvious danger signs, examiners are also looking for other warning signs or red flags that may require a credit union to slow down indirect lending.”
Some of the red flags include having a high concentration of indirect loans to total loans or net worth without adequate controls in place; tying loan officer bonuses to indirect loan volume incentive programs and not performing adequate analysis of overall indirect loan portfolio performance.
“Credit unions should regularly test for compliance with the contract terms by comparing delinquency, loan losses, and rates of return to previous results and budget levels,” the agency instructed. “These statistics and those from the static loan pool analysis should be compiled for each vendor and the overall program. Credit unions should implement changes based on the analysis of the program and individual vendors participating in the program,” the NCUA added.
The NCUA wants credit unions to exercise significant care when making loans in partnership with third party vendors or organizations.
“NCUA examiners are reviewing Call Reports for increasing amounts of repossessed autos or increasing indirect lending delinquency and loan losses,” the agency wrote in an August letter to credit unions on the topic. “In addition to those obvious danger signs, examiners are also looking for other warning signs or red flags that may require a credit union to slow down indirect lending.”
Some of the red flags include having a high concentration of indirect loans to total loans or net worth without adequate controls in place; tying loan officer bonuses to indirect loan volume incentive programs and not performing adequate analysis of overall indirect loan portfolio performance.
“Credit unions should regularly test for compliance with the contract terms by comparing delinquency, loan losses, and rates of return to previous results and budget levels,” the agency instructed. “These statistics and those from the static loan pool analysis should be compiled for each vendor and the overall program. Credit unions should implement changes based on the analysis of the program and individual vendors participating in the program,” the NCUA added.
Popular Posts
-
ABILENE TEACHERS FEDERAL CREDIT UNION REPO ABILENE TELCO FEDERAL CREDIT UNION REPO ACCESS COMMUNITY CREDIT UNION REPO ALLIANCE FEDERAL CRED...
-
ADVANTAGE BANK REO ALLEGIANCE CREDIT UNION REPO (3rd Party Site) BANK OF COMMERCE REO CHEROKEE STRIP CREDIT UNION REPO CITY N...
-
1ST CREDIT UNION OF GAINESVILLE ACHIEVA CREDIT UNION ALIVE CREDIT UNION BAPTIST HEALTH S. FLORIDA FEDERAL CREDIT UNION BAY CREDIT ...
-
ALPINE CREDIT UNION REPO AMERICA FIRST CREDIT UNION REPO BANK OF AMERICAN FORK (Real Estate) REO BANK OF THE SAN JUANS (Real Esta...
-
North Carolina repossessions ACCLAIM FEDERAL CREDIT UNION REPO ALLEGACY FEDERAL CREDIT UNION REPO AMERICAN PARTNERS FEDERAL CREDI...
-
Tennessee repossessions AGC CREDIT UNION REPO AMERICAN SECURITY BANK & TRUST (Real Estate) REO APPLIANCE CREDIT UNION REPO ...
-
1ST GATEWAY CREDIT UNION REPO AFFINITY CREDIT UNION REPO ALLIANT CREDIT UNION REPO ASCENTRA CREDIT UNION REO (Real Estate) ASCENTR...
-
New York repossessions 1ST NATIONAL BANK OF SCOTIA (Real Estate) REO 1ST NATIONAL BANK OF SCOTIA REPO (Vehicles) BANK OF RICHMONDVI...
-
South Carolina repossessions 1ST PATRIOTS FEDERAL CREDIT UNION REPO BNC BANK (Real Estate) REO CAPITAL BANK (Real Estate) REO ...
-
RepoFinder.com features a FREE Nationwide list of Bank and Credit Union Repossessions. Here is a list of trusted financial instituti...