BOARD STREAMLINES TROUBLED DEBT RESTRUCTURINGS (FROM PAGE 1)
including amendments made to loan terms through a
formal TDR;
n Requiring federally insured credit unions to adopt and
adhere to written policies to govern the credit union’s loan
workout arrangements with borrowers; and
n Reaffirming current industry practices by requiring credit
unions to discontinue interest accrual on loans past due by
90 days or more, and to establish requirements for
returning such loans to accrual status.
“In exercising these new loan workout flexibilities, striking
the right balance is very important. Some modified loans are
still very high risks for default, as 16 percent of outstanding
modified loans are still delinquent,” said Chairman Matz.
“Credit unions must not only establish internal policies to
manage loan workouts, but also manage the accompanying
interest rate risks that come with modifying long-term loans
at historically low fixed rates.”
Timetable for Credit Union Compliance with the TDR Rule changes:
REGULATORY CHANGE
EFFECTIVE DATE
COMPLIANCE DATE
NCUA ACTION
Treatment of TDR
past due status
consistent with
revised loan contract
July 2, 2012
June 30, 2012
Effective for the quarter ending
June 30, 2012, NCUA will change
Call Report instructions on the
delinquency supplemental schedule
consistent with the guidance
accompanying the final rule.
Written loan
workout policy
July 2, 2012
Oct. 1, 2012
Starting in the fourth quarter of
2012, NCUA examiners will review
policies during supervisory contacts
and examinations.
Non-accrual
requirement
implementation
July 2, 2012
Oct. 1, 2012
Starting on Oct. 1, 2012, credit unions
will no longer be able to accrue for
loans past due 90 days or more.
Revisions to remainder
of data collection
on TDRs
July 2, 2012
Dec. 31, 2012
Effective with the quarter ending
Dec. 31, 2012, NCUA will revise
Call Report data collections and
instructions consistent with the
guidance accompanying the final rule.
NCUA Chairman Debbie Matz welcomes
over 75 participants to her third Listening
Session, co-hosted by NCUA Region IV in
St. Louis on June 5, 2012. Participants
discussed a wide range of ideas to
improve the regulatory environment and
the examination process. After the June 12
Listening Session in Orlando, the next two
Listening Sessions are scheduled for July 10
in San Diego and July 31 in Denver.
