OAR 441-720-0230
Adoption of Federal Statutes and Regulations Concerning Loan Participations


(1)

Federal Tie-In: A state credit union is authorized to participate in making loans with financial institutions as defined in ORS 706.008 (Additional definitions for Bank Act) within the limitations of the board of directors’ written participation loan policies, provided:

(a)

No credit union may obtain an interest in a participation loan if the sum of that interest and any indebtedness owed to the credit union by the borrower exceeds 10 per cent of the credit union’s unimpaired capital and surplus;

(b)

A written master participation agreement is properly executed, acted upon by the credit union’s board of directors, or if the board has so delegated in its policy, by the investment committee or senior management official(s) and retained in the credit union’s office. The master agreement must include provisions for identifying, either through a document that is incorporated by reference into the master agreement, or directly in the master agreement, the participation loan or loans prior to their sale; and

(c)

A credit union may sell to or purchase from any participant the servicing of any loan in which it owns a participation interest.

(2)

An originating lender which is a state credit union must:

(a)

Originate loans only to its members;

(b)

Retain an interest of at least 10 per cent of the face amount of each loan;

(c)

Retain the original or copies of the loan documents; and

(d)

Require the credit committee or loan officer to use the same underwriting standards for participation loans used for loans that are not being sold in a participation agreement unless there is a participation agreement in place prior to the disbursement of the loan. Where a participation agreement is in place prior to disbursement, either the credit union’s loan policies or the participation agreement shall address any variance from non-participation loan underwriting standards.

(3)

A participant state credit union that is not an originating lender must:

(a)

Participate only in loans it is empowered to grant, having a participation policy in place that sets forth the loan underwriting standards prior to entering into a participation agreement;

(b)

Participate in participation loans only if made to its own members or members of another participating credit union;

(c)

Retain the original or a copy of the written participation loan agreement and a schedule of the loans covered by the agreement; and

(d)

Obtain the approval of the board of directors or investment committee of the disbursement of proceeds to the originating lender.

(4)

Additional State Requirements:

(a)

In addition to the requirements of the federal provisions stated in this rule, a state credit union must file with the Director:

(A)

A representation that the board of directors has adopted written policies and procedures concerning loan participations and recourse;

(B)

An undertaking that it will not keep or acquire any loan participation interest which exceeds the loan to one borrower requirements in ORS 723.512 (Loan limit) and, except for this provision, will follow the guidelines for loan participations stated in this rule; and

(C)

An undertaking that each loan agreement will contain a provision that provides complete access to the agency to all records of each participant concerning the loan transaction.

(b)

Any provision of subsection (a) of this section except paragraph (a)(B) of this section may be waived or modified by order of the Director if no undue risk is created by the waiver or modification and the credit union has policies, procedures, and strategies covering the changed items or where it is necessary for regulatory purposes.

Source: Rule 441-720-0230 — Adoption of Federal Statutes and Regulations Concerning Loan Participations, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=441-720-0230.

441‑720‑0100
Scope and Application
441‑720‑0110
Definitions
441‑720‑0120
Risk Weights and Risk Categories
441‑720‑0130
Minimum Capital Ratio
441‑720‑0140
Procedures, Risk-Weight Ratios and Computations
441‑720‑0150
Required Reserve Transfers
441‑720‑0160
Fidelity Bond Coverage for Corporate Credit Union
441‑720‑0200
Purpose, Authority for Federal Tie-In Rules
441‑720‑0210
Adoption of Federal Regulations Concerning Purchase, Sale and Pledge of Eligible Obligations
441‑720‑0215
Procedures Required Prior to Exercise of Certain Investment Powers
441‑720‑0220
Investments in Investment and Borrowing Repurchase Agreements, Bankers Acceptances, Participation in Federal Funds Authorized
441‑720‑0225
Adoption of Federal Statutes, Rulings, Policy Regarding Mortgage Assumptions
441‑720‑0230
Adoption of Federal Statutes and Regulations Concerning Loan Participations
441‑720‑0300
Definitions
441‑720‑0305
Member Business Loan
441‑720‑0310
Implementation of Member Business Loan Program
441‑720‑0315
Member Business Loan Policies and Procedures
441‑720‑0320
Collateral and Security Requirements
441‑720‑0325
Recordkeeping Requirements
441‑720‑0330
Aggregate Loans to a Member or Associated Members
441‑720‑0335
Calculation of the Aggregate 15% Limit
441‑720‑0340
Aggregate Member Business Loan Limit for a Credit Union
441‑720‑0345
Exceptions to the Aggregate Member Business Loan Limit for a Credit Union
441‑720‑0350
Exception Procedure
441‑720‑0355
Construction and Development Lending
441‑720‑0360
Classification of Member Business Loans to Reserve for Potential Losses
441‑720‑0365
Minimum Reserves for Potential Loan Losses
441‑720‑0370
Prohibited Member Business Loans
441‑720‑0375
Available Waivers for Specific Loan Types
441‑720‑0380
Waiver Procedure
Last Updated

Jun. 8, 2021

Rule 441-720-0230’s source at or​.us