March 24, 2020

NCUA offers guidance on virtual meetings, joins agencies to provide loan modification relief

NCUAThe NCUA Sunday joined with other federal and state regulators to encourage financial institutions to support borrowers impacted by the coronavirus, specifically address troubled debt restructurings (TDRs). Additionally, heeding NAFCU's call, the NCUA Friday announced that credit unions can now adopt a bylaw amendment to hold virtual annual meetings in certain circumstances.

The joint agency announcement, which also included the Federal Reserve Board and CFPB, indicated that institutions will not be criticized for working with borrowers in a "safe and sound manner, and [the agencies] will not direct supervised institutions to automatically categorize loan modifications as TDRs."

"Short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs," said the NCUA in a statement. "This includes short-term — for example, six months — modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant."

The statement also outlines the agencies' supervisory views on past-due and nonaccrual regulatory reporting of loan modification programs.

On virtual meetings, NAFCU Regulatory Compliance Counsel Loran Jackson outlined the new bylaw amendment in a recent Compliance Blog post.

"FCUs wishing to adopt this bylaw amendment can do so with a two-thirds vote of its board of directors, ensuring that any cross-citations conform to their particular bylaws," wrote Jackson. "NCUA also reminded FCUs that they can postpone or delay their annual meeting, which may require amending the 'fill-in-the-blank' provision that states the timing requirement of their meeting."

Read Jackson's post for more on the letter and guidance.

In another announcement Monday, the NCUA said federally insured, low-income designated credit unions that incur unexpected costs due to the coronavirus are eligible to request urgent needs grants from the agency.

"The NCUA recognizes that the COVID-19 outbreak will affect all federally insured credit unions and their members to varying degrees,” said Chairman Rodney Hood in a statement. “If you are a low-income credit union that needs assistance during this difficult time, I encourage you to apply for these grants to ensure you can continue to meet the financial needs of your members and communities.”

NAFCU remains in close contact with the NCUA and President and CEO Dan Berger last week spoke with NCUA Board Chairman Rodney Hood to further discuss the association's requests for relief to help credit unions deal effectively with the coronavirus.

The agency previously released initial guidance for credit unions in a Letter to Credit Unions outlining steps the agency is taking to support credit unions through the examination and supervision process. In response, Berger called for additional flexibility and urged the agency to consider more provisions.

To assist with NAFCU's advocacy efforts, credit unions are encouraged to email any updates on how their institution is being impacted and steps that they are taking to help members to

Stay tuned to NAFCU Today for the latest developments, and access the association's coronavirus resource page.