The League – Fostering Financial Wellbeing for All

NCUA: Letter to Credit Unions No. 10-CU-15 – Indirect Lending and Appropriate Due Diligence (August 2010).

This letter details the risk management practices that are appropriate and necessary to soundly manage an indirect lending program.

Regardless of the type of indirect lending relationship established, no credit union should delegate loan approval authority to a third party. Every credit union has the responsibility to perform its own due diligence, establish effective controls and monitoring systems to mitigate the risks to the credit union’s earnings and net worth.