NCUA Issues Proposed Rule to Permit Purchase of Mortgage Servicing Rights

The National Credit Union Administration (NCUA) recently issued a proposed rule to permit federal credit unions to purchase MSRs to loans from other federal credit unions under certain conditions.  Among other things, the proposed rule requires that:

1. The underlying mortgage loans of the MSRs are loans the federal credit union is empowered to grant;
2. The federal credit union purchases the MSRs within the limitations of the federal credit union’s board of directors’ written purchase policies; and
3. The board of directors or investment committee approves the purchase in advance.

The NCUA invites comments on the proposed rule, including questions that “raise issues the Board intends to incorporate in the final rule to ensure appropriate safeguards and limitations, and will consider the comments and supporting information it receives in response to this notice.”

Comments must be received on or before February 1, 2021.