Regulatory Alerts2010-08-09 | I-10-04Use of a CUSO to Take Assignment of a Delinquent Mortgage Loan and Foreclose, Hold and Dispose of Collateral with Environmental Risks
The Washington Department of Financial Institutions issued Interpretive Letter I-10-04 to clarify that state-chartered credit unions may form a Credit Union Service Organization to foreclose on and hold delinquent mortgage collateral with environmental risks. The guidance requires credit unions to conduct environmental risk assessments and follow specific NCUA and state bulletins to mitigate operational and legal liabilities associated with Other Real Estate Owned properties. Additionally, credit unions must obtain a letter of non-objection from the Director of Credit Unions if their investment in the CUSO exceeds one percent of total assets.
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