Newswire: Dec. 20, 2017
Dateline: Arlington, Va.
The National Association of Federally Insured Credit Unions (NAFCU) has asked the Federal Reserve Bank of St. Louis to develop and adopt guidelines for its borrower-in-custody program that allow electronic signatures for auto loans as pledged collateral.
Currently, the lack of guidance from the St. Louis Fed puts a lot of friction into a service area comprising seven states and 11 million members of credit unions, argued Andrew Morris, the regulatory affairs counsel for the NAFCU.
“Credit unions are experienced lenders that know how to create legally binding and enforceable agreements utilizing electronic records and signatures,” Morris wrote to the St. Louis Fed.
“The Federal Reserve Bank of St. Louis should permit acceptance of e-signed auto loans as pledged collateral under (borrower-in-custody) program guidelines,” he continued, “provided that credit unions can demonstrate that their electronic lending platform produces records which preserve the marketability of the loan.”
The Federal Reserve Bank of St. Louis is one of two federal reserve banks in Missouri. Its jurisdiction covers all of Arkansas, and portions of Illinois, Kentucky, Indiana, Tennessee and Mississippi.
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