Credit unions need to be more tough-minded on loan modifications, willing to say "no" but still look for ways to accommodate borrowers with alternative products, a Florida regulator told CU executives Wednesday.
Addressing the first joint gathering of the League of Southeastern Credit Unions in Orlando, Robert Hayes, chief of Florida's Credit Union Regulation unit, said, "sometimes you have to say no to a situation that you find yourself in" considering it might be wise "to face the reality today instead of putting it off until tomorrow, which is uncertain. Don't kick it down the road."
Hayes, accompanied by a team of regulators from the state division speaking at a session on compliance, urged CU leaders "to have the courage to help the member have a sustainable plan."
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Some CUs, however, are failing to do due diligence on loan applications, he said making it urgent CUs be smart on loan products. Still, it's okay to "say no" though when managing loans, it's imperative you offer the member an alternative plan.," he added.
Hayes forecast that the rest of the year in Florida would remain tough with a poor economy lasting into 2011. With another NCUA assessment coming at the end of the year, CUs should start accruing for it starting today, he said.
Some 700 CU executives from Florida and Alabama are attending the LSCU conclave, the first such conference since last year's consolidation of the Florida and Alabama Credit Union Leagues.
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