Debt types › Bank & credit union portfolios

Debt sales for banks and credit unions

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Short answer: Banks and credit unions can sell charged-off loan portfolios to cut recovery costs and turn written-off assets into cash. OCC Bulletin 2014-37 sets expectations for national banks. NCUA has said federal credit unions may sell charged-off loans and has no specific sale guidelines (NCUA 1997 opinion), though third-party risk is a current exam focus.

What does a typical sale process look like?

  1. Board or policy approval and a buyer due-diligence standard.
  2. Scrub the file: remove litigation, bankruptcy, deceased, SCRA and near-SOL accounts.
  3. Masked data tape to vetted buyers under NDA.
  4. Bids, purchase and sale agreement, repurchase terms.
  5. Close, transfer media, notify credit bureaus.

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What else do sellers ask?

Why do banks sell debt?

To recover cash from charged-off accounts, cut collection cost and free staff. Bank sales are subject to supervisory expectations such as OCC Bulletin 2014-37 on buyer due diligence and data accuracy.

Can a credit union sell charged-off loans?

Yes. NCUA's 1997 legal opinion says federal credit unions may sell charged-off loans. State-chartered credit unions should check state rules.

Which accounts should a bank exclude from a debt sale?

Under OCC Bulletin 2014-37: accounts in litigation, settled or settling, deceased debtors, unclear ownership, SCRA-protected, disaster areas, minors, and accounts near the statute of limitations.

Information only, not legal, tax or accounting advice. Price figures are third-party estimates, not offers. Last reviewed: October 2026.