NCUA Approves TDR Final Rule, Summary of Board Meeting Available on League Web Site

Posted by Marissa Anema Friday, May 25, 2012 11:13:00 AM


ALEXANDRIA, Va. – The NCUA, at it’s monthly board meeting Thursday, approved a final rule to amend Part 741 of NCUA Regulations, along with an Interpretative Ruling and Policy Statement (IRPS) on “Loan Workouts and Nonaccrual Policy, and Regulatory Reporting of Troubled Debt Restructured Loans” (TDRs) as Appendix C to Part 741. The final rule is generally consistent with the proposal, and includes clarifications and improvements CUNA sought.

Under the new TDR rule, credit unions will soon be allowed to modify TDR loans without having to immediately classify those loans as delinquent. The new TDR rules, which will go into effect 30 days after they are published in the Federal Register, will set consistent standards for the management of loan workout arrangements that assist borrowers, and eliminate confusion between TDRs and other loan modifications. The rules also make some changes to loan status calculations, and require credit unions to discontinue interest accrual on loans that are 90 days or more past their due date.

Credit unions will need to establish their own written policies for TDR management and loan workout arrangements and NCUA Chairman Matz during the meeting said that credit unions will be given some freedom to design their own policies and plans.

The board also approved a final rule that removes Part 742 to eliminate the Regulatory Flexibility (RegFlex) program effective 30 days from publication in the Federal Register. The final rule adopts the proposed changes almost exactly as proposed, and also make changes to related rules designed to ease some compliance burdens on federal credit unions (FCUs).

At the meeting, the board also approved a final IRPS that amends IRPS 11-1 on NCUA’s Supervisory Review Committee (SRC) to remove the RegFlex designation determinations from the list of material supervisory determinations credit unions may appeal to the SRC. Even though this is a final rule, NCUA will accept comments for 30 days after it is published in the Federal Register.

Unless NCUA withdraws the rule after comments are received, it will be effective 60 days from publication in the Register.

A complete summary of NCUA’s board meeting is available for download on the League Web site at

This aspect of the NJCUL Web site is limited to members only and is password protected. To request a login, visit


Comments are closed on this post.