Thursday, April 25, 2019

Texas Regulator: Early Delinquencies on the Rise

The Texas Credit Union Department in its April Newsletter noted that after several years of strong loan growth some credit unions are experiencing an increase in early delinquencies.

The newsletter stated that early delinquencies can result in higher future losses and could impact the financial health of the credit union.

The Texas regulator encouraged that credit union management provide monthly trend reports to its board members regarding loans 30 to 59 days past due. it also encouraged a dialogue between management and board members regarding collection efforts on these loans.

Credit union management and board are encouraged to identify and address causes for the deterioration in loan quality, such as loosening underwriting standards, limited collection activities, and lending by credit risk tiers. This is essential for controlling and managing credit risk.
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