TEMPE, Ariz. — Even without real estate loans at risk, credit unions ought to possess a thorough understanding of what's contained in portfolios as they gird for higher delinquencies and foreclosures, NCUA's top Western states regulator said Thursday.
“All credit unions need to be prepared to talk to their members, their front line tellers, board members and the press about the products they provide,” said Melinda Love, NCUA's Region Five director.
In an interview, Love said the “cascading events” in the mortgage markets of recent days have created new urgency requiring CU managers “know if they have sub-prime, Alt A, or nontraditional mortgages on the books and for their HELOC programs they need to know what the first mortgage looks like.”
This is not something new, she said, since the agency has been harping on this topic “for the last few years”, but now the potential exists that even without real estate “some members may default on car and credit card loans as they try to pay higher mortgages.”
Recent developments “appear to be having a cascading effect as one event plays off another, which makes it more and more imperative that credit unions be prepared from an operational and public relations standpoint,” she concluded.
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