The NCUA released last week a Supervisory Letter to examiners that reveals how the field staffers will evaluate credit union compliance with recent changes in troubled debt restructuring loan rules.
According to the letter from Larry Fazio, director of the NCUA's Office of Examination and Insurance, the agency will take a risk-based approach to examining TDR management, considering the level of TDR activity, complexity of the credit union and risk exposure. Should the examiner determine that TDR workouts expose the credit union to significant risk, he or she will conduct a thorough review based on the guidance set forth in the letter, Fazio wrote.
The examination process will include a check to ensure the credit union is complying with new loan nonaccrual standards that were updated in a final rule issued during the NCUA Board's May 2012 meeting, the agency said Tuesday.
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