The Credit Union National Association and the National Association of Federally-Insured Credit Unions are taking differing positions on how long a National Credit Union Administration interim final rule allowing temporary deferrals for real estate appraisals should remain in effect.
CUNA supports the short period the rule may be used but does not suggest a date for its expiration. The rule allows certain real estate appraisals to be delayed for up to 120 days following the closing of a transaction for certain residential and commercial real estate deals.
NAFCU, on the other hand, is asking the agency to extend the expiration date on the rule to the end of the first quarter of 2021.
At its April meeting, the NCUA adopted the interim final rule to give credit unions more flexibility as a result of the coronavirus crisis. Interim final rules go into effect as soon as they are published in the Federal Register. The agency then solicits comment on the rule. Comments on the rule are due Friday.
The rule adopted by the NCUA in April is similar to one that has been adopted by federal banking regulators.
In a letter to the NCUA, Kaley Schafer, NAFCU’s regulatory affairs counsel, wrote that extending the date to the end of the first quarter of next year would account for the uncertainties surrounding the coronavirus pandemic. She added that considering current loan interest rates, there is still a demand for mortgage loans, so it is imperative that the deadline be extended.
CUNA officials said they appreciated the interim final rule and saw an advantage for the limited timeframe. “We believe the limited timeframe for the deferral will in some respects help to manage potential risk by balancing the need for immediate relief due to the pandemic with safety and soundness concerns for risk to credit unions as lenders,” Luke Martone, CUNA’s senior director of advocacy and counsel wrote in a letter.