ALEXANDRIA, Va. (9/16/13)--The National Credit Union Administration is encouraging credit unions in areas distressed by severe flooding in Colorado to make prudent loans with special terms and reduced documentation for members affected by the disaster, among other things.
Modifications may include extending the terms of loan repayments, restructuring a borrower's debt obligations, and easing credit terms for new loans to certain borrowers, consistent with prudent practices.
The agency invoked its disaster policy over the weekend and in additions to encouraging special loan terms, the NCUA will, under the disaster policy and where necessary:
- 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.
The agency reminded that federal credit unions can extend their assistance beyond their own membership and may also provide assistance to other credit unions, their members, and non-members in the affected areas. They may extend:
- Emergency financial services for non-members, including check cashing, access to ATM networks or other services to meet short-term emergency needs of individuals in the affected areas can be provided under the authority to engage in charitable activities. Federal credit unions providing services on this charitable basis may not impose charges for services that exceed their direct costs; and
- A federal credit union may provide services to other credit unions that it is authorized to perform for its own members or as part of its operations. This activity is part of a federal credit union's incidental powers, so it may impose charges for those services.
Credit unions in need of NCUA assistance dealing with members affected by the flooding should contact their primary supervisory official.
The NCUA in its weekend release also said its examiners are already surveying credit unions operating in affected areas. Some credit unions and branches in locations affected by the flooding may have curtailed hours or services, the agency noted, and added that credit union members in these areas should contact their credit unions or check their websites for the latest information.
Share deposits at federally insured credit unions remain protected up to $250,000 by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund is backed by the full faith and credit of the U.S. Government.
See News Now's
related story, "Colorado CUs Closed In Flash Floods."