Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ARLINGTON, Va.-Bankruptcy reform is still very much at or near the top of most credit unions’ crucial issues. Nearly 72% of the credit union respondents said bankruptcy reform was very important to their institutions, NAFCU’s February Flash Report found, and 18% stated it was an important issue. In particular, 49% of credit unions said the mandatory Chapter 13 consideration was most important to them, while 20% wanted to eliminate `cramdowns,’ where debts are determined based on an object’s-like a car’s-value rather than the amount remaining on a loan. Respondents also frequently cited mandatory financial education (8%), clarifying the right of reaffirmation (8%), revising automatic stay provisions (5%), and extending the period between bankruptcy filings (3%). NAFCU’s Flash survey also delved into bankruptcy-related issues and trends. Half of credit unions responding to the survey, which is typically around 100, said that bankruptcies increased at their institutions in 2004. Another 19% reported that the number of bankruptcies was about the same as the 2003 level. On average, the credit unions told NAFCU that about 40% of their charge-offs were due to bankruptcy last year. However, the Flash found several credit unions that said nearly all of their charge-offs were due to bankruptcy filings. Credit unions use various methods to determine likely bankrupts. Forty-two percent said they use a specific credit scoring methodology. Another 25% responded that they attend creditor meetings, while another 42% occasionally attend. Just 6% said they always challenge members’ reported expenses and another 25% said they occasionally raise objections. Once a member has filed, nearly 45% answered that they always screen members past 60-days of purchases for excesses. Another quarter indicated they occasionally screen. Most credit unions (84%) said the bulk of their bankruptcies were from members below the average member age. -

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.