NCUA: Credit unions have flexibility to assist Louisiana flood victims
Agency working to ensure access to services; Deposits remain insured
ALEXANDRIA, VA (August 25, 2016) — After the worst U.S. natural disaster since Super Storm Sandy in 2012, the National Credit Union Administration is continuing to work with federally insured credit unions in Louisiana to help them better serve flood victims and ensure continuity of operations.
“Louisiana’s credit unions can and should work with their members, many of whom have lost everything they own, to help them recover and rebuild their lives,” NCUA Board Chairman Rick Metsger said. “Working constructively with credit union borrowers who may experience financial difficulty as a result of this extraordinary flooding is in the long-term best interest of both the credit union and the member. In this time of great need, credit unions also may extend a helping hand to nonmembers.”
NCUA staff is working with credit unions in a variety of ways to help keep the doors open and provide the services that flood victims need.
NCUA encourages credit unions to work with their members and consider options for assisting them that include offering new loans with special loan terms or rates and reduced documentation, providing payment flexibility for current loans, or potentially restructuring existing loans. Federal credit unions with questions about these options should contact their examiners.
As noted in NCUA Letter to Credit Unions 11-CU-13, federal credit unions also may provide emergency financial services to nonmembers as part of their authority to engage in charitable activities under their incidental powers. Such services could include check cashing for nonmembers, access to ATM networks, or other means to cash, to meet the short-term, emergency needs of nonmembers. Federal credit unions providing these emergency services must do so on a charitable basis, meaning that service charges cannot exceed direct costs.
Credit union members in areas struck by flooding should contact their credit unions or check their credit unions’ websites for the latest information about special services, location of operations and hours of service. Members with questions about their deposit insurance coverage can find information online here, or they may contact NCUA’s Consumer Assistance Center at 800-755-1030 between 7 a.m. and 4 p.m. Central.
During natural disasters, NCUA works with state regulators and state credit union leagues to ensure all federally insured credit unions are aware of and can utilize NCUA’s available assistance. Under the agency’s disaster relief policy, NCUA will, when necessary:
- Encourage credit unions to make prudent loans with special terms and reduced documentation to affected members;
- Reschedule routine examinations of affected credit unions, if necessary;
- Guarantee lines of credit for credit unions through the Share Insurance Fund; and
- Make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.
Low-income-designated credit unions affected by flooding can apply for up to $7,500 in Urgent Needs grant assistance to repair damage or restore services to members. Information about Urgent Needs Grants is available online here. Agency staff members are helping eligible credit unions in the flooded areas apply for the low-income credit union designation.
Member deposits at federally insured credit unions remain protected by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000.
About National Credit Union Administration (NCUA)
The NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, the NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 124 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. The NCUA also protects consumers and educates the public on consumer protection and financial literacy issues.