Compliance: What to watch out for at the end of 2020 | 2020-11-24

Ten months ago, who would have thought there would be pandemic-related mask orders, fenders at counters, and social distancing decals on the floor of branch lobbies?

The only constant has been the commitment of credit unions to do what they do best: help and serve their members.

In addition, regulators have issued a series of agency guidelines and regulatory changes since the start of the coronavirus (Covid-19 pandemic. While we can’t predict what to expect in the months ahead, here’s a look at some of the issues to consider as we try to navigate the end of 2020.

The NCUA’s review posture has remained the same since the onset of the pandemic, with most reviews taking place offsite and documents shared electronically and securely.

In early 2020, the NCUA announced one of his priorities would be reviewing credit union loan programs and underwriting standards and procedures. Due to the pandemic, the NCUA has instead shifted focus examining the steps credit unions have taken to help members facing financial difficulties.

Credit unions may experience an increase in requests for policy reviews and the use of loan restructuring strategies. Interesting is the risk management controls of credit unions and how credit unions are helping those in financial difficulty as a result of the pandemic.

Based on NCUA review guidelines and interagency statements, the agency encourages credit unions to work cautiously with borrowers. From the onset of the pandemic, guidelines indicated that well-structured loan housing in this environment should be viewed as positive actions to mitigate the adverse effects of COVID-19 on borrowers and facilitate a credit union’s ability to recover its loans.

These agency issues offer prudent risk management and consumer protection practices, as well as guidance to meet accounting and regulatory reporting requirements. They also stress the importance of strong internal controls in today’s environment.

So let’s talk about additional amenities. Now that we are about 10 months away from the pandemic, many member accommodations are nearing or nearing an end.

While some borrowing members are able to repay and can resume their payments, others, unfortunately, cannot. They are probably feeling the pressure of impending payments and realize that they are likely to face persistent financial difficulties for the foreseeable future.

A Federal Financial Institutions Review Council (FFIEC) A joint statement released in August addressed additional lending possibilities for borrowers. Here are some questions to consider.

FOLLOWING: Communications to the borrower

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