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InfoSight Highlight: Loan Workouts and Non-accrual Policy, and Regulatory Reporting of Troubled Debt Restructured Loans
Friday, January 13, 2017 6:45 AM

NCUA has amended its regulations to require federally insured credit unions (FICUs) to maintain written policies that address the management of loan workout arrangements and non-accrual policies for loans, consistent with industry practice or Federal Financial Institutions Examination Council (FFIEC) requirements. The final rule includes guidelines set forth as an interpretive ruling and policy statement (IRPS) and incorporated as an appendix to the rule that will assist FICUs in complying with the rule, including the regulatory reporting of troubled debt restructured loans (TDR loans or TDRs) in FICU Call Reports.

Final Rule and IRPS

Lending Policies

The final rule requires FICUs to adopt policies that govern loan workout arrangements and non-accrual practices. A FICU’s written non-accrual standards must include the discontinuance of interest accrual on loans that are past due by 90 days or more and requirements for returning such loans, including MBLs workouts, to accrual status.

To set NCUA’s supervisory expectations and assist FICUs in compliance, the final rule includes an appendix to Part 741, which thoroughly addresses the loan workout account management and reporting standards FICUs must implement in order to comply with the rule. It also explains how FICUs report their data collections related to TDRs on Call Reports.

Appendix C to Part 741, Interpretive Ruling and Policy Statement on Loan Workouts, Non-accrual Policy, and Regulatory Reporting of Troubled Debt Restructured Loans

Source:  InfoSight Compliance.

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