NCUA Updates its 2020 Supervisory Priorities in Light of the COVID-19 Pandemic
The National Credit Union Administration (NCUA) has updated its supervisory priorities for 2020 in response to economic conditions that have emerged as a result of the COVID-19 pandemic.
Coronavirus Aid, Relief and Economic Security (CARES) Act
The NCUA has added the CARES Act as a supervisory priority to reflect the importance of its provisions, including but not limited to:
- Suspension of the requirement to categorize certain loan modifications as troubled debt restructurings (TDRs)
- The proper reporting of payment information to consumer reporting agencies for those borrowers performing under a modification agreement
- The prohibition against foreclosure on all single family, federally backed mortgage loans
- Granting up to a 360-day forbearance for borrowers that are experiencing a financial hardship as a result of the pandemic
Allowance for Loan and Lease Losses
Although credit risk was previously a supervisory priority for the NCUA, the agency is now shifting its focus to address the adequacy of a credit union’s allowance for loan and lease losses in light of the economic downturn resulting from the pandemic.
Serving Hemp-Related Businesses
Credit unions providing financial services to hemp-related businesses can expect examiners to monitor their performance in light of the NCUA’s letter to credit unions issued in June. The letter (20-CU-19) provides additional guidance for credit unions serving hemp-related businesses.
The following items remain supervisory priorities for the NCUA in 2020:
- Bank Secrecy Act
- Regulations E, P, V and Z
- The Military Lending Act (MLA) and the Servicemembers Civil Relief Act (SCRA)
- Payday Alternative (PAL) Loans
- Cybersecurity
- LIBOR Cessation Planning
- Liquidity Risk
The agency has removed from its supervisory priorities any reference to the current expected credit losses (CECL) accounting methodology.
More information can be found here.
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