Compliance Blog

ICYMI: NCUA COVID-19 Response Webinar

With over 5,000 credit unions in the United States, some people may have missed out on NCUA’s webinar yesterday as the maximum number of registrations was 2,500. Whether you missed this webinar because things are extremely busy, or you could not register in time, here’s a helpful summary of some information NCUA shared.

Overall, there was not a lot of new information provided by NCUA, but Chairman Rodney Hood shared initial remarks on the agency’s COVID-19 response, acting general counsel Frank Kressman gave a high-level overview of key provisions of the CARES Act, and the Office of Examination and Insurance discussed supervisory approaches during this time.

Chairman Hood

According to Chairman Hood, NCUA continues to work on guidance regarding issues like offsite exams, the Central Liquidity Facility (CLF), and more details on how credit unions can work with COVID-19 affected borrowers. NCUA wants to work with credit unions so they can provide prudent relief to borrowers. At this time, the agency is soliciting direct feedback or questions from credit unions at NCUA is also periodically refreshing materials located on its COVID-19 resources page.

CARES Act Summary

Acting general counsel Frank Kressman highlighted main points of the CARES Act. This includes an overview of the temporary changes to the CLF, which include access for corporate credit unions and an increase in the NCUA Board’s borrowing authority. The Board can also increase share insurance coverage on non-interest bearing transaction accounts, so that will be an issue to continue monitoring.

There is also temporary relief from the troubled debt restructuring (TDR) requirements for loans modified due to COVID-19, including a forbearance or a delay in principal or interest for a loan that was not more than 30 days past due as of December 31, 2019. Kressman provided a high-level overview of other key provisions such as:

  • The amendment to the Fair Credit Reporting Act relating to how to report accounts when an accommodation was made due to COVID-19 (more information on this in tomorrow’s blog);
  • Forbearances for certain federally-related mortgages; and
  • The temporary moratorium on evictions for certain multi-family mortgages.

Kressman went on to note that the CARES Act also creates multiple economic stabilization programs through loans, loan guarantees, and other investments. NCUA will monitor the establishment of these programs as they develop.

Note, NAFCU created a chart summarizing the key provisions of the CARES Act, available here.

Finally, Kressman reminded credit unions of a recent interagency statement encouraging financial institutions to offer small dollar loans to impacted members. While these programs must be offered in a safe and sound manner, he noted that there is no regulation prohibiting a credit union from offering a 0% interest loan.

Office of Examination and Insurance

The Office of Examination and Insurance (E&I) addressed its role in some CARES Act implementation as well as some specifics on the status of its exam program. E&I is working on streamlining access to the CLF including reviewing the waiting period on new members, collateralization requirements, and the time CUs must wait to cash in their stock. E&I is also working on a TDR webinar for the future, as one which was originally scheduled for March 27, 2020 was postponed.

E&I noted some areas of operational flexibility including a reminder that whether an appraisal needs to be interior is generally at the discretion of the appraiser, if made in line with industry guidelines. As a reminder, NCUA’s rule states that if an appraisal meets the Uniform Standards of Professional Appraisal Practice then it satisfies the requirement to obtain an appraisal. NCUA asked that a credit union reach out if the CU believes it may fall below 6% net worth. If a CU makes exceptions to operational policies, E&I indicated the office will consider the extraordinary circumstances but advised CUs to reach out to their NCUA examiner or regional office to discuss specific questions.

Finally, on the topic of exams and supervision, the off-site exam process announced a couple of weeks ago is still in place. One key item to note – NCUA will not issue examination reports until further notice unless the exam was completed before March 16, 2020. With regard to outstanding corrective actions, according to E&I, examiners will be reasonable with respect to any requests to postpone or reprioritize concerns in light of COVID-19.

NCUA is also reaching out to all CUs to monitor the impact of COVID-19 on the industry.

You can find NCUA’s slide deck from yesterday’s presentation here. NAFCU’s host of resources, including COVID-19 compliance FAQs, updated FAQs on the paid leave requirements, and a summary of regulator responses to the ongoing pandemic can be found here. Chairman Hood also updated credit unions on NAFCU’s Q1 member call-in on March 31, 2020. If you missed it and you are a NAFCU member, you can access the recording here (log in required).

About the Author

Brandy Bruyere, NCCO, Vice President of Regulatory Compliance, NAFCU

Brandy Bruyere, NCCO, Vice President of Regulatory ComplianceBrandy Bruyere, NCCO was named vice president of regulatory compliance in February 2017. In her role, Bruyere oversees NAFCU's regulatory compliance team who help credit unions with a variety of compliance issues. She also writes articles for NAFCU publications, such as the NAFCU Compliance Blog.

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