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| Compliance Blog Explains Shutdown Assistance Options |
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A new NAFCU Compliance Blog post out today explains that financial regulators, including the NCUA, have encouraged institutions they supervise to work with borrowers whose pay might be impacted by the ongoing partial government shutdown.
In the blog, NAFCU Compliance Counsel David Park notes that some credit unions may face difficulties doing so because of internal lending policies.
"NCUA expects that credit unions will administer their loan programs and any potential workouts with furloughed employees in a safe-and-sound manner while also adhering to their internal lending policies," Park writes. "Operationally, credit unions might focus on historic income like a W-2 instead of requiring a current paystub and underwriting credit on the basis of the member’s reasonable expectation of future income once the shutdown ends."
Park describes steps some credit unions are taking to provide assistance, including zero percent personal loans, skip-a-pays, waiving withdrawal fees, and amnesty periods for delinquent payments.
In addition, Park also explains short-term loss mitigation options like forbearance and repayment programs under Regulation X and what is required when the end of a short-term forbearance program approaches or the short-term option is based on an incomplete loss mitigation application.
Copyright 2019. NAFCU.
Read the full blog article at this (link) |
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