![]() 7 Section 107(17) of the FCUA provides further that an FCU may “exercise such incidental powers as shall be necessary or requisite to enable it to carry on effectively the business for which it is incorporated.” 8 The FCUA expressly grants FCUs the power to, among other activities, purchase, hold and dispose of property make loans to members make certain investments accept share, share draft and share certificate accounts and sell and cash negotiable instruments. The Housing and Urban Development Act of 1968, among other things, amended the National Bank Act to expressly authorize banks “to issue and sell securities which are guaranteed pursuant to section 306(g) of the National Housing Act." 4 Fourteen years later, Congress passed the Garn-St Germain Depository Institutions Act of 1982 that, among other things, amended the FCUA to provide the same express authority to FCUs “to issue and sell securities which are guaranteed pursuant to section 306(g) of the National Housing Act." 5 The addition of this new language to the FCUA clearly indicates that Congress, at a minimum, considers FCUs to be institutions capable and qualified to securitize assets, and intended for them to be able to sell qualifying mortgage loans through the issuance and sale of Ginnie Mae securities pursuant to section 306(g) of the National Housing Act. ![]() NCUA has been asked whether a federal credit union (FCU) currently has the authority to issue and sell securities under the Federal Credit Union Act 1 (FCUA) and NCUA’s regulations, or whether statutory or regulatory changes would need to be made before an FCU could engage in such activities.Ĭonsistent with the FCUA and NCUA’s regulations, it is the opinion of NCUA’s Office of General Counsel that an FCU does have the authority to issue and sell securities as a power incidental to its operation, 2 and, in the case of Government National Mortgage Association (Ginnie Mae) securities, as a power expressly authorized under the FCUA. ![]()
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