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TDR Guidance Released For NCUA Examiners
ALEXANDRIA, Va. (4/3/13)--The National Credit Union Administration has shared with credit unions guidance it provided to agency examiners on how to review loan workouts, nonaccrual policies, and regulatory reporting of troubled debt restructurings.

The guidance, which was released to the public in a Tuesday letter to credit unions (12-CU-03), provides additional clarity and consistency related to the review of loan workout programs in credit unions, the agency noted.

The release of this guidance was encouraged by the Credit Union National Association, and CUNA is reviewing the guidance at this time. "We appreciate the NCUA's decision to release this letter and guidance, and plan to review it with our Accounting Subcommittee," CUNA Deputy General Counsel Mary Dunn said.

The NCUA letter and guidance address:

  • Appropriate nonaccrual policies and procedures for loan workouts and TDRs;
  • Revised regulatory reporting requirements for loan workouts;
  • What credit unions should address in a workout policy including controls and decision-support systems consistent with the size and scope of their program;
  • Key components of a sound information system for loan workouts and TDRs; and
  • How examiners will determine which loan workouts are, or are not, TDRs;
  • Other important considerations for NCUA examiners.
NCUA TDR rules effective as of Dec. 31, 2012, allow credit unions to modify TDR loans without having to immediately classify those loans as delinquent. The rules also set consistent standards for the management of loan workout arrangements that assist borrowers, and are intended to eliminate confusion between TDRs and other loan modifications.

Credit unions are also no longer required to report modified-loan information on their 5300 Call Reports. This change affects the delinquency, charge-off and recovery, and specialized-lending schedules, the NCUA has noted.

For the NCUA letter and guidance, use the resource link.
Other Resources

NCUA Letter 13-CU-03
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