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June 20, 2012 – Portions of a revised rule on credit unions' reporting of troubled debt restructurings are set to take effect July 2, and these and other requirements are spelled out for NAFCU members in an association Final Regulation posted online.

NAFCU generally supported the reporting changes. As in the proposed rule, these changes are not applied to member business loans in NCUA's final rule. The association is continuing to urge NCUA to apply the new reporting measures to MBLs.

The Final Regulation, 12-EF-05 (login required), summarizes the rule as well as the interpretive ruling and policy statement issued with it in May by the NCUA Board. Briefly, the rule requires all federally-insured credit unions to maintain written policies on loan workouts and nonaccrual loans. It also revises previous regulatory reporting requirements on troubled-debt restructured loans.

A credit union's policy on loan workout arrangements and nonaccrual practices govern the use of loan workouts and establishes controls to ensure the policy is consistently applied. The final rule and IRPS also establish specific rules on accrual and nonaccrual of interest payments on loan workouts.

Compliance deadlines are July 2 for the TDR reporting changes. Written policies must be adopted by credit unions boards by Oct. 1, and NCUA will begin to collect nonaccrual status data Dec. 31.