Amy K: COVID-19 & NCUA Guidance
by Amy Kleinschmit
Chief Compliance Officer

Loan Modifications and Reporting

On Sunday, the National Credit Union Administration (NCUA) along with other federal financial institution regulatory agencies issued guidance on working with borrowers affected by COVID-19. As stated in the press release, “The agencies encourage financial institutions to work with borrowers, will not criticize institutions for doing so in a safe and sound manner, and will not direct supervised institutions to automatically categorize loan modifications as troubled debt restructurings (TDRs).”

The Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus, which can be found here, provides that, “the agencies view loan modification programs as positive actions that can mitigate adverse effects on borrowers due to COVID-19”

Much of the Statement relates to accounting for loan modifications. “The agencies have confirmed with staff of the Financial Accounting Standards Board (FASB) that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not TDRs.  This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.”

Annual Meeting Flexibility

On Friday, NCUA issued letter to Federal Credit Unions 20-FCU-02, which can be found here. The letter provides that, “Because of President Trump’s national emergency proclamation on March 13, effective immediately, a federal credit union may adopt by a two-thirds vote of its Board of Directors the below bylaw amendment to Article IV without undergoing further bylaw approval processes with the NCUA. FCUs that choose to adopt this amendment should ensure that the cross-citations conform to their version of the bylaws.”

The Letter includes language of a bylaw amendment – “emergency exception to in-person quorum requirements” which includes specific criteria that must be met such as “The credit union has the technological capacity to facilitate virtual meeting attendance, voting, and participation.”

Alternatively, a FCU also has flexibility to postpone its annual meeting. While there is no law or regulation that prohibits a FCU from postponing its annual meeting, it should provide notice of the rescheduled meeting as required in the FCU Bylaws. Under current circumstances, a FCU might consider delaying its annual meeting until a more appropriate time. For example, a FCU could delay its 2020 annual meeting to December 2020 and still meet the annual meeting requirement.


Finally, the NCUA has added to its list of FAQs – this relating to scams.

10. Are there any scams related to the coronavirus that credit unions and consumers should be aware of?

On March 6, 2020 the Cybersecurity and Infrastructure Security Agency (CISA) released an alert reminding individuals to remain vigilant for scams related to the coronavirus. Cyber actors may send emails with malicious attachments or links to fraudulent websites to trick victims into revealing sensitive information or donating to fraudulent charities or causes. Exercise caution in handling any email with a COVID-19-related subject line, attachment, or hyperlink, and be wary of social media pleas, texts, or calls related to COVID-19.

CISA encourages individuals to remain vigilant and take the following precautions.

  • Avoid clicking on links in unsolicited emails and be wary of email attachments. See Using Caution with Email Attachments and Avoiding Social Engineering and Phishing Scams for more information.
  • Use trusted sources — such as legitimate, government websites — for up-to-date, fact-based information about COVID-19.
  • Do not reveal personal or financial information in email, and do not respond to email solicitations for this information.
  • Verify a charity’s authenticity before making donations. Review the Federal Trade Commission’s page on Charity Scams for more information.
  • Review CISA Insights on Risk Management for COVID-19 for more information.”

Remember – all guidance, including FAQs, the NCUA has issued relating to COVID-19 can be found here -

As always, CUAD members may contact Amy Kleinschmit with any compliance related questions.



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