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NCUA’s Supervisory Letter Addresses MBL Waiver Guidance

Wednesday, February 27, 2013   (0 Comments)
Posted by: Erin Thacher
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The National Credit Union Administration’s (NCUA) latest supervisory letter outlines the process necessary to achieve member business loan (MBL) waivers in Letter to Credit Unions (13-CU-02), an attached supervisory letter, and supervisory guidance.

The supervisory letter guidance is designed to help credit unions understand the MBL waiver process and aid them as they work to maintain safe and sound MBL portfolios. This letter is a positive example of the agency’s effort to provide MBL waiver documents of this kind. NCUA’s guidance letter was prompted in part by discussions at agency listening sessions held throughout the country.

The agency guidance details what credit unions must include in a waiver application and the agency’s review process for waiver applications.

The guidance expands what is needed to be granted waivers by addressing:
  • MBL waiver types;
  • MBL "blanket" waivers;
  • Existing loans not subject to need for waiver request;
  • Borrower personal guarantee requirements and the type of guarantee required based on different business ownership structures;
  • Associated borrower definition;Waiver documentation requirements; and
  • Procedures to streamline the process for obtaining waiver for credit unions buying a participation-interest in an MBL.

Links for the NCUA MBL waiver documents:
NCUA Letter to Credit unions 13-CU-02
Supervisory Letter on MBL Wavier Guidelines