WASHINGTON--The NCUA’s proposed rule to clarify third-party servicing of indirect vehicle loans would provide federal credit unions with needed change and flexibility, offering parity with many state-chartered credit unions, America's Credit Unions asserted.
In comments sent Tuesday, America’s Credit Unions supported removing the regulation, indicating it would remove an "overly prescriptive," one-size-fits-all requirement that limits credit unions’ ability to structure their own indirect lending programs.
The proposal is outlined in the eighth round of the NCUA Deregulation Project, addressing Section 12 CFR Part 701.21(h), Third-Party Servicing of Indirect Vehicle Loans. It is intended to reduce administrative costs and compliance complexity, enabling credit unions to serve their members more efficiently, ACU said.
“Removing the prescriptive limits tied to third-party servicing of indirect vehicle loans would help restore regulatory parity, allow FCUs to align their policies more closely with market realities, and reinforce the principle that credit union boards and management are best positioned to oversee these programs,” states the letter, continuing that “doing so would create a more level playing field for all credit unions seeking to participate in these programs.”