I wanted to compliment Credit Union Times for an excellent article on TDR reporting [Nov. 2, page 1].
It portrayed the great difficulty that credit unions have complying with Call Report instructions that actually inhibit and discourage the modification of loans for members. A credit union’s sole purpose is to meet the financial service needs and better the lives of its members. Regulations that get in the way of that being done need to be examined and changed.
NCUA Chairman Debbie Matz should be commended for being willing to tackle the issue. We appreciate her looking at what the actual impact is of regulations and rules the agency puts forth in Washington and then making the necessary changes to make sure credit unions prosper.
The TDR Call Report instructions create an unintended consequence that needs to be remedied, and we are hopeful the NCUA will listen to the ideas that credit unions have to effectively monitor modifications without adding costly burdens to credit unions.
The current instructions do not allow anyone to know how much of delinquency is real delinquency and what are modified loans that are structured properly to succeed.
It is a relatively easy problem to solve, and we hope that NCUA will seize the opportunity to help credit unions without sacrificing effective monitoring.
All credit unions care about public perception also. Publicly overstating real delinquency only hurts a credit union’s reputation and forces them to think about whether they should modify loans or not.
By the way, Michigan First is actually rated five stars by Bauer, not four as was in the article.
Thank you again for bringing this issue to light. Continued great success to Credit Union Times.
Michigan First CU
Lathrup Village, Mich.