Financial regulators this weekend said they will be flexible in judging loan modifications credit unions make as a result of the coronavirus, as CUNA also said it will be flexible with annual membership meeting requirements.
“The agencies understand that this unique and evolving situation could pose temporary business disruptions and challenges that affect banks, businesses, borrowers and the economy,” the regulators, including the NCUA and the CFPB said in a statement.
The agencies said they will not criticize financial institutions that mitigate risk through “prudent actions” that are consistent with safe and sound practices.
The agencies said they have confirmed with the Financial Accounting Standards Board that short-term modifications made in response to the coronavirus crisis will not be considered as a Trouble Debt Restructure (TDR).
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TDRs are subject to additional accounting and reporting requirements by a financial institution.
Agency examiners also will not criticize prudent efforts to modify the terms of existing loans, the statement said.
In addition, financial institutions will not be expected to designate loans with deferrals caused by the crisis as past due.
In a separate letter to credit unions, NCUA Chairman Rodney Hood said a credit union may hold its annual meeting and other meetings — with the exception of a session to expel a member — virtually and without an in-person quorum, as long as certain conditions are met.
Those conditions include requirements that the credit union’s community or headquarters is in an area where a state of emergency or disaster has been declared.
In addition, the credit union must have the technological capabilities to allow members to attend, vote and participate virtually. And the credit union must provide members with seven days’ advance notice of the change.
The NCUA also said credit unions may cancel or reschedule their annual meetings as a result of the coronavirus crisis.