August 28, 1997
Jacqueline Dial, VP Lending/Collections
Heritage Valley Federal Credit Union
P.O. Box 3617
York, PA 17402-0617
Dear Ms. Dial:
You asked whether a federal credit union (FCU) can sell its nonperforming,
charged-off loans which you also refer to as the FCU's distressed
asset portfolio. Yes, an FCU can sell its charged-off loans to
other parties under its authority to "purchase, hold, and
dispose of property necessary or incidental to its operations."
12 U.S.C. ยง1757(4). We do not have any guidelines that
specifically address the sale of charged-off loans. If you have
particular questions about a transaction, you may find it helpful
to discuss them with NCUA's Region II at (703) 838-0401.
Sincerely,
Sheila A. Albin
Associate General Counsel
GC/MSC:bhs
SSIC 4650
97-0722
cc: Region II