Happy Middle Child Day! You’re not the wise elder, nor the adorable baby of the family but we still appreciate you!
Speaking of appreciation, thousands of borrowers are grateful for the efforts of credit unions as the pandemic continues. Over the past few months, many credit unions have been offering loan modifications and accommodations for members affected by the COVID-19 pandemic. These options have included renewable forbearance periods, elimination of fees, reduction of interest rates, reduction of payment amounts, increased lines of credit and more. Unfortunately, with the continued impact on the economy, many credit union members are still out of work or facing financial hardship.
Last week, NCUA along with other federal regulators, issued a joint statement on additional loan accommodations related to COVID-19. Regulators encourage credit unions and other financial institutions to continue offering accommodations for affected borrowers. The statement describes principles for working with borrowers in a safe and sound manner to reduce the long-term impact of current financial challenges: prudent risk management practices, well-structured and sustainable accommodations, consumer protection, accounting and regulatory reporting and internal control systems. These are all important for credit unions, but I will narrow today’s discussion to consumer protection and internal control systems.
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