TDR Burdens Eased, RegFlex Expanded by NCUA Board
Final rules passed at the NCUA board meeting May 24 include the extension of regulatory flexibility standards to all credit unions, and new rules for troubled debt restructuring that will require written loan workout and nonaccrual policies.
Despite the new written policy requirements, which were opposed by trade organizations, credit unions scored a win in that the past due status of TDRs will now be calculated consistently with loan contract terms, rather than requiring past due status to be reported until six consecutive on-time payments have been made. The new reporting requirements will go into effect June 30.
Both CUNA and NAFCU expressed disappointment that MBL workouts will be subjected to different standards. CUNA President/CEO Bill Cheney said he was pleased with the new rules, but he “had hoped more could be done on member business loans.”
NAFCU General Counsel Carrie Hunt said she opposed the personal guarantee requirement for member business loans and said she hoped the NCUA would reverse that requirement in the future. Hunt also took issue with the new written TDR policy requirements, saying it would place a new regulatory burden on credit unions.