CUs invited to comment on proposed CRE loan workouts, accommodations statement

Credit unions can comment on a proposed policy statement regarding commercial real estate loan accommodations and workouts.

According to the NCUA, the proposed statement reaffirms the key principles from an Oct. 30, 2009 statement that serves as “a useful resource for both agency staff and financial institutions in understanding risk management and accounting practices for CRE loan workouts.”

The proposed statement addresses financial institutions’ handling of loan accommodations and workouts on matters like risk management, classification of loans, regulatory reporting and accounting considerations. It includes updated references to supervisory guidance and updated loan workout examples.

The NCUA, along with the FDIC and OCC in consultation with state bank and credit union regulators, are inviting the public to comment on the proposed policy statement for 60 days following publication in the Federal Register. Comments are due Aug. 3.

“The proposed policy statement will assist credit unions with managing risks associated with multi-family housing and other commercial real estate,” said Todd Harper, NCUA chairman. “It also provides credit unions with guidance on working constructively with CRE borrowers who are experiencing financial difficulty. I encourage credit union stakeholders to review and provide comments on the proposed policy statement.”

Additional insight regarding the proposed policy statement can be found on the New York’s State of Mind blog, written by Henry Meier, New York Credit Union Association SVP/general counsel.

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