ALEXANDRIA, Va. — NCUA issued a letter to credit unions (07-CU-02), reminding them to keep Hurricane Katrina in mind regarding hardship claims and workout programs for affected members.
“Financial institutions serving the U.S. Gulf Coast region have demonstrated significant flexibility in responding to the changing needs of their customers by offering relief when appropriate to the customer's circumstances,” NCUA's letter read. “These temporary hardship and workout programs have facilitated recovery efforts throughout the Gulf Coast. However, given the extent of devastation caused by Hurricane Katrina, many uncertainties remain, including insurance claims that are still being processed. As a result, some customers may need additional time to resolve financial uncertainties related to the effects of the hurricane.”
The federal and related state agencies reminded financial institutions in the impacted area of the principles outlined in the Hurricane Katrina Examiner Guidance (NCUA Letter to Credit Unions 06-CU-01). “The Katrina Guidance makes it clear that an institution retains flexibility in its workout or restructuring arrangements with customers still facing uncertainties. Working constructively with borrowers is in the long-term best interest of both the financial institution and the customer,” NCUA wrote in the newer letter.
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