The NCUA and other financial regulators have adopted a policy statement that aims to support prudent commercial real estate loan workouts.
The policy statement addresses NCUA's position and expectations regarding credit unions' risk management practices for member business loan workout programs and individual member business loan workout arrangements. Among them are risk management practices for renewing and restructuring MBLs should be appropriate for the complexity and nature of the lending activity and consistent with safe and sound lending practices and regulatory requirements.
Other practices are prudent loan workout arrangements should improve the prospects for repayment of principal and interest, and should be supported by a comprehensive analysis of the member-borrower's willingness and ability to repay the loan, an evaluation of support provided by guarantors, and a current assessment of the value of the underlying collateral.
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