LAKE BUENA VISTA, Fla. — For credit unions that anticipate needing some flexibility, applying early for a blanket waiver might help them with their response time with borrowers.  

Vin Vieten, NCUA program officer for member business lending, offered that suggestion during a Wednesday afternoon session at NACUSO's annual conference. He said the blanket waiver has more wiggle room than a one-time waiver.

One attendee at the session asked if the waiver process can be considered at the national level rather than NCUA's regional offices. Vieten said regional directors have a better viewpoint for assessing their particular areas and as a result, the protocol will remain.

“Regional directors have the authority to look at the whole picture,” he said.

Before issuing a waiver, the NCUA wants a credit union to be well-capitalized with a CAMEL rating of one or two, Vieten noted. A credit union must also employ strong practices to measure, monitor and control risk.

With risk monitoring, the NCUA wants to know what happens after the loan is on the books, Vieten said. Some of the checklist items the regulator wants to see include if regular site visits are being made to the borrower and if the required, regular financial reports and reviews are occurring.

The NCUA also wants to see the use of financial covenants when appropriate. Testing for compliance with the required and mutually agreed-upon financial performance reports and covenants are other risk- monitoring components, Vieten said.

Annual relationship reviews that are presented to the appropriate lending authority and establishing portfolio concentration limits help with monitoring as well, he added.

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