Credit union regulator halts onsite exams over coronavirus fears

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The National Credit Union Administration will not conduct onsite exams as the industry grapples with the fallout from the coronavirus pandemic.

The regulator said Monday in a letter to credit unions that it was “limiting examination and supervision work over the next couple of weeks to offsite procedures only, with a few exceptions for exigent circumstances.” It could extend these restrictions, if necessary.

Examiners will coordinate with credit union employees to securely transfer information needed to complete offsite examinations and “will be mindful of the impact of information requests on any credit unions experiencing operational and staffing challenges” related to the outbreak, said the letter, which was signed by NCUA Chairman Rodney Hood.

“As we evaluate credit unions over the coming months, consistent with long-standing practices, examiners will consider the extraordinary circumstances credit unions are facing when reviewing the credit union’s financial and operational condition,” the letter said.

There are more than 3,400 cases of the coronavirus and 68 related deaths in the U.S., according to data from the Centers for Disease Control on Monday. Local and state governments are taking drastic measures, such as closing schools and restaurants, to help halt the spread of the disease.

Credit unions have been bracing for potential staff shortages as employees become ill and for a hit to their bottom line if consumers and companies affected by the economic slowdown can no longer repay debt.

The letter assured institutions that “examiners will not criticize a credit union’s efforts to provide prudent relief for members” when done with proper oversight. It suggested CUs could take measures such as waving ATM and overdraft fees, implementing payday alternative loan products and easing restrictions on cashing nonmember checks.

Credit unions can also adjust the terms of existing loans for borrowers in affected areas and ease requirements for new credit without facing criticism from examiners.

Additionally, NCUA said in the letter it had implemented telework until March 30 for its own employees based at its headquarters and regional offices. It said there should be little disruption to operations from the move and it would continue to process field-of-membership expansion applications and other requests. Credit unions should file applications electronically whenever possible, the regulator encouraged.

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Coronavirus Compliance Exams Financial regulations Federal Credit Union Act NCUA