ALEXANDRIA, Va. —The NCUA Board on Thursday extended regulatory flexibility standards to all credit unions, but willrequire written loan workout policies for troubled debt restructuring by Oct. 1.

However, credit unions scored a win in that TDRs will not berequired to be reported as past due until six consecutive timelypayments have been made. Instead, effective June 30, TDR past duestatus will now be calculated consistently with loan contractterms.

The NCUA also removed the requirement to manually trackTDRs.

Written policy requirements “should be commensurate with eachcredit union's size and complexity, and must be in line with thecredit union's broader risk mitigation strategies,” which willavoid a one size fits all approach, Chairman Debbie Matz said atthe board's meeting in its headquarters in Alexandria, Va.

TDRs may not finance unpaid interest and fees, but do allowcredit unions to include third-party fees, such as insurance orproperty taxes.

The NCUA removed a proposed TDR provision that would haveimposed an aggregate limit for loan workouts based upon apercentage of net worth. Instead, the final rule includesadditional reporting requirements that will focus on the creditunion's restructuring practices and how they increasecollectability.

The new rule also requires credit unions to increase TDRreporting to volunteers, and supporting documentation must be madeavailable to examiners.

Credit unions must place loans into nonaccrual status ifprincipal or interest has been in default for 90 days or more,unless the loan is well secured, or if the loan is maintained on acash basis and full payment is not expected.

Loans may return to accrual status if the past due status isless than 90 days, GAAP does not require it to be maintained on acash or cost recovery basis, and repayment within a reasonableperiod is assured.

Member business loans, however, were given a different set ofaccrual status requirements: MBL nonaccrual status must bemaintained until the credit union can document the borrower'sfinancial condition and prospects for repayment, which wouldinclude a minimum of six consecutive timely payments.

New rules extending regulatory flexibility standards to allcredit unions were also passed. Nonmember deposit flexibility,while extended to all credit unions, lost a standardized capexemption. While credit unions can apply to their NCUA regionaldirector for an exemption, the rule sets a threshold that cannotexceed 20% of the credit union's total shares.

Other RegFlex provisions granted to all credit unions include asix-year time frame to partially occupy unimproved land for futureexpansion, the ability to purchase zero-coupon investments, and theability to engage in borrowing repurchase transactions withmismatched maturities.

Private label mortgage-backed securities are also now allowedfor all credit unions, although well capitalized institutions havefewer restrictions.

Chief Financial Officer Mary Ann Woodson presented quarterlyfinancial reports for the share insurance fund and corporate fund,which largely remained unchanged from December 2011 reporting.

CAMEL ratings improved across the board during the firstquarter. Woodson told Board Member Gigi Hyland she expects theshare insurance fund's equity ratio to end the year around 1.30%,slightly lower than the first quarter's 1.32% figure.