NCUA Chairman Rodney E. Hood issued a letter to credit unions Monday outlining a range of strategies credit unions should consider when determining how to address the challenges associated with COVID-19.
“The credit union industry has a long history of assisting their members in times of need,” Hood said in the letter. “I want to assure you that the NCUA’s examiners will not criticize a credit union’s efforts to provide prudent relief for members when such efforts are conducted in a reasonable manner with proper controls and management oversight.”
Hood stated that the NCUA is encouraging credit unions to work with affected borrowers, noting that credit unions’ efforts to work with members in communities under stress could help to contribute to the strength and recovery of those communities. Hood said that efforts also serve the long-term interests of impacted credit unions, and may include:
- waiving ATM fees;
- increasing ATM daily cash withdrawal limits;
- waiving overdraft fees;
- waiving early withdrawal penalties on time deposits;
- waiving availability restrictions on insurance checks;
- easing restrictions on cashing out-of-state and non-member checks;
- easing credit terms for new loans for members who qualify;
- offering or expanding payday alternative loan programs;
- increasing credit card limits for creditworthy borrowers;
- waiving late fees for credit card and other loan balances; or
- offering payment accommodations, such as allowing borrowers to defer or skip some payments, or extending the payment due dates, which would avoid delinquencies and negative credit bureau reporting caused by any COVID-19-related disruptions.
Hood also provided a list of frequently asked questions — available below — regarding the coronavirus, NCUA and credit union operations:
What flexibilities exist for FCU’s in planning annual meetings? “A FCU has flexibility to postpone its annual meeting,” according to the guidance. “While there is no law or regulation that prohibits a FCU from postponing its annual meeting, it should provide notice of the rescheduled meeting as required in the FCU Bylaws.”
If a FCU delays its annual meeting and election, what happens to the FCU’s Board? Under the FCU Bylaws, the term of a FCU director continues until “the election and qualification of successors,” the guidance states.
What flexibilities exist for FCU monthly board of directors meetings? The FCU Act requires FCU boards to meet monthly, but require only one face-to-face board of directors meeting per year. All other meetings may be conducted by video or teleconference. The one in-person meeting requires the actual presence of only a quorum of directors, not every director, and absent directors may participate by video or teleconference.
May a FCU restrict access or close its facilities? A FCU may adopt reasonable measures to safeguard the health and safety of its staff and members, however, it should be done in a uniform and consistent manner and “FCUs should follow the direction of any federal, state or local authorities with respect to social distancing or related measures,” the guidance emphasized.
What impact is this having on the NCUA’s examination and supervision program? Effective Monday, March 16, all examination-related staff are required to be offsite through at least March 30, 2020, and the policy will be re-evaluated at least every two weeks and is subject to change, according to the guidance.
What technology is available to credit unions to share exam documents with their examiners? Examiners and credit unions can exchange information through the NCUA’s Secure File Transfer Portal. A credit union guide for using the SFTP portal is available online.
What if COVID-19 disrupts a credit union’s ability to file its quarterly call report timely? “Credit unions encountering such problems and not able to meet the filing deadline should file as soon as possible thereafter and inform the NCUA’s Office of Examination and Insurance at CallReportLateFiler@ncua.gov as to the reason for the delay when they do file,” the guidance states. “State Chartered credit unions should also contact their respective state regulator.”
Can a credit union use the NCUA’s central liquidity facility for contingent liquidity purposes? Access to the CLF is voluntary and open to all credit unions that join the CLF and purchase a prescribed amount of stock, according to the guidance.
What other options do credit unions have to manage any impact on liquidity of the COVID-19 situation? “Credit unions should evaluate their contingent liquidity plans in light of the current environment,” the guidance states. “They should also monitor their standard sources of funding to determine if a contingent source from a backup provider may be necessary and if so become reacquainted with how such access works. For credit unions with access, the Federal Reserve’s ‘discount window’ is available to assist with eligible depository institutions, including credit unions.”
Both the full letter to credit unions and frequently asked questions can be accessed on the NCUA website.