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In the wake of extensive flooding in Louisiana, NCUA is encouraging credit unions to offer prudent loans with special terms and to offer emergency financial services to nonmembers where possible.

Federal credit unions may provide emergency financial services to nonmembers, as noted in Letter to Credit Unions 11-CU-13, as part of their authority to engage in charitable activities under their incidental powers. This might include check cashing and access to ATMs.

During natural disasters, NCUA says it encourages credit unions to make prudent loans with special terms and reduced documentation to affected members. NCUA will also reschedule routine exams as necessary, guarantee lines of credit for credit unions through the National Credit Union Share Insurance Fund and make loans to meet credit unions' liquidity needs through the Central Liquidity Fund.

Low-income-designated credit unions affected by flooding can also apply for up to $7,500 in Urgent Needs grant assistance to repair damage or restore services to members.

"Louisiana's credit unions can and should work with their members, many of whom have lost everything they own, to help them recover and rebuild their lives," NCUA Board Chairman Rick Metsger said on Thursday. "Working constructively with credit union borrowers who may experience financial difficulty as a result of this extraordinary flooding is in the long-term best interest of both the credit union and the member. In this time of great need, credit unions also may extend a helping hand to nonmembers."

NCUA also noted that member deposits at federally insured credit unions remain protected by the NCUSIF, which insures individual accounts up to $250,000.