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Catalyst Corporate Loan Participation Program Nears $1 Billion
Tuesday, September 6, 2016 6:50 AM

Catalyst Corporate Federal Credit Union’s two-year-old loan participation program is nearing the $1 billion milestone. “We’ll likely surpass that $1 billion mark in the next few weeks,” said Jeff Hamilton, Catalyst Corporate’s vice president of member credit.

Hamilton said a strong lending environment within segments of the credit union industry has provided growing interest and support of the loan participation program.

“We have been working with several prolific loan sellers,” Hamilton said, “We’re at the point where we need more credit unions that are interested in buying loans. We have some solid repeat buyers, but we know there is a broader universe of credit unions needing loan assets that could benefit from our program. We’d like to get them involved also.”

Since launching in 2014, the Catalyst Corporate loan participation program has helped nearly 100 credit unions buy and sell almost $1 billion in loans. And millions more dollars are in a growing pipeline.

Buyer participation is subject to NCUA rules, Hamilton said. “The place to start, if interested, is establishing necessary policies,” he added.

Catalyst Corporate began developing its new loan participation program during 2013, following the National Credit Union Administration’s issuance of a final rule detailing what credit unions can and cannot do when sharing loans.

The rule includes numerous provisions designed to mitigate risk: setting guidelines in the areas of concentration limits, risk retention, and underwriting. With many hurdles to clear, credit unions value the expertise Catalyst Corporate brings as a facilitator to the loan participation process. The program follows a straightforward framework for both buyers and sellers.

“In addition to the help we provide keeping the loans in the credit union system, our unique reporting and remittance services have been well received,” Hamilton said.

Catalyst Corporate works with sellers to identify, assemble, and price pools of loans, which are comprised of consumer loans such as auto loans and mortgages. Once a participation package has been assembled, Catalyst Corporate staff markets the offer for sale, locates buyers, and gathers and provides the due diligence information on a secure website for buyers to review. Catalyst Corporate then coordinates the processing of documents between sellers and buyers, processes the settlement transaction, and provides monthly reporting and remittance services.

“Catalyst Corporate is a one-stop shop that offers a full range of services, making the loan participation process easy and convenient for all parties,” Hamilton said.

For more information, please contact Jeff Hamilton at 214-703-7870 or visit catalystcorp.org/r/participations.

Catalyst Corporate Federal Credit Union is an endorsed business partner of Credit Union Resources, Inc., a wholly owned subsidiary of Cornerstone Credit Union League.