Communication to the Credit Unions
IDCU Availability & Communication
Division staff may be reached by phone and email. Any correspondence, which would normally be mailed or faxed to the Division office, should be emailed if possible. If you are unsure of whom to contact, please email your request to firstname.lastname@example.org. Please maintain regular correspondence with your Examiner-In-Charge (EIC).
This guidance is subject to change so please refer back often. Credit unions must complete their own due diligence for each of the compliance areas. This guidance does not constitute legal advice.
COVID-19 Credit Union Operational Guidance
December 16, 2020
Please Refer to IDCU Guidance found in this PDF document: Board of Directors Election Virtual Meeting
April 2, 2020
The IDCU has received several inquiries about the ability of a credit union to hold an electronic vote for board of directors now and then hold the in-person vote at a later date. The IDCU has considered this and will not approve a bifurcation of the voting possess. The IDCU understands the desire to complete the membership vote for board of directors, especially when the candidates are uncontested or when there are as many candidates as there are available board positions. However, splitting the vote is not allowed.
As an alternative, Iowa law already allows for the board of directors to fill an open board position and these provisions are applicable even though the annual meeting is being postponed. As such, if there is an open seat on the board of directors now or is vacated prior to when the annual meeting is able to be held, then the board of directors may appoint an individual to fill the open position until the next annual meeting. It is allowable for the board of directors to fill the open position with one of the slated candidates. However, whoever fills the vacant board position will need to stand for election at the annual meeting. Also, the board must act in good faith when filling a vacant board position.
April 29, 2020
Please Refer to IDCU Guidance found in this PDF document: Virtual Annual Meetings
March 16, 2020
If the credit union held an annual meeting within calendar year 2019, then the credit union will have the entire calendar year of 2020 to hold their next annual meeting. The Division will not require the annual meeting to be held 12 months after the prior annual meeting. However, any changes to the timing of the annual meeting must be done in good faith.
We will consider the possibility of waiving the annual meeting requirement, if and when such a discussion appears to be required. At this time, no such waivers will be issued.
April 10, 2020
Please Refer to IDCU Guidance found here: COVID-19 Guidance see also: Working with Borrowers Affected by the COVID-19 Pandemic
April 3, 2020
Please refer to IDCU Guidance found in this PDF document: COVID-19 Small Business Lending Guidance
March 26, 2020
Governor Reynolds suspended the regulatory provisions of Iowa Code chapters 646, 654, 655A, and 656 allowing for the commencement of foreclosure proceedings, or the prosecution of ongoing foreclosure proceedings, on residential, commercial, and agricultural real property located in the state of Iowa, on March 22. Suspension of these provisions applies for the duration of the Proclamation or any future extension. The Governor’s proclamation does not suspend a borrower’s obligation to make mortgage payments.
March 26, 2020
Governor Reynolds suspended the personal appearance requirement for notarizations found in Iowa Code § 9B.6, but only to the extent that the notarial act complies with the requirements of section 6 of 2019 Iowa Acts chapter 44 (Senate File 475) and any additional guidance provided by the Iowa Secretary of State regarding approved communication technology. For additional information, see https://sos.iowa.gov/covid19/remotenotarization/form.aspx.
March 26, 2020
The Division encourages Credit Unions to work with their members in this time of economic volatility. In accordance with appropriate management oversight and consistent with safe and sound banking practices and applicable laws Credit Unions are encouraged to consider:
- Waiving overdraft and ATM fees;
- Increasing ATM daily cash withdrawal limits;
- Waiving early withdrawal penalties on time deposits;
- Offering or expanding payday alternative loan programs;
- Increasing credit card limits for creditworthy borrowers;
- Waiving late fees for credit card and other loan balances;
- Easing restrictions on cashing non-member checks;
- Easing credit terms for new loans for members who qualify;
NCUA and FDIC have issued letters to financial institutions setting out additional efforts, which Credit Unions may consider.
Iowa Credit Unions must comply with the Iowa Consumer Credit Code and Chapter 533.
March 26, 2020
Credit unions are operating in an unprecedented time and the Iowa Division of Credit Unions recognizes the efforts Iowa Credit Unions are making to meet your member’s needs. Member data still needs to be secured through appropriate channels to prevent data loss or breach. The IDCU discourages the use of personal computing devices to conduct work remotely without proper protection. Credit unions should adhere to their Information Security policies to mitigate potential data losses. Member data security remains important and should follow Gramm-Leach-Bliley requirements. We recommend all credit unions review the FFIEC IT Handbook resources on Remote Access and Use of Remote Devices.
Credit unions are on the front lines of defending against fraud schemes. The Iowa Attorney General’s Office released guidance on Emerging Fraud Schemes due to COVID-19. If you become aware that one of your members may be a victim, please refer them to this resource and follow your normal credit union fraud procedures.
March 20, 2020
The Department of Revenue issued an order extending the filing deadline for the Credit Union Moneys and Credits Tax Confidential Report. Credit unions will have until July 31, 2020 to file their report with the Iowa Department of Revenue. The payment deadline remains the same.
The Moneys & Credits Tax Statement does not need to be notarized.
March 26, 2020
Loan Deferment Programs or Skip-a-pay: The Iowa Consumer Credit Code generally allows for deferral of payments for consumer credit transactions. A credit union must “ensure it either anticipates these programs in the loan agreement or is prepared to properly modify contractual agreements under state law. See National Association of Federally-Insured Credit Unions, https://nafcucomplianceblog.typepad.com/nafcu_weblog/skip-a-pay/. See also: Working with Borrowers Affected by the COVID-19 Pandemic.
Iowa Code Section 537.2503 requires the parties to “agree in writing to a deferral of all or part of one or more unpaid installments” but does not define what constitutes a written agreement.
The Administrators of the Iowa Consumer Credit Code agree that the parties may satisfy the requirement for a written deferral agreement with traditional hard-copy correspondence (e.g., application or approval letter) or with electronic correspondence (e.g., email or statement notice). The parties may also satisfy this requirement with an oral conversation between a borrower and creditor and a corresponding written or electronic communication that documents the terms of the deferral agreement, including application of fees and interest.
A maximum fee of thirty dollars may be charged for each deferred payment. Iowa Code § 537.2502. This fee, if charged correctly at the time of deferral, does not constitute a finance charge when calculating the applicable interest rate.
Changes to policies must also be approved by the Board of Directors and well documented. Credit Unions must inform the Board of Directors of changes to implementation and necessary changes to procedures.
Iowa code does not include a maximum number of times skip-a-pay or loan deferment programs may be used in the life of the loan; however, credit unions must operate such programs with an emphasis on safety and soundness. The Iowa Division of Credit Unions will evaluate such programs to ensure safety and soundness of the credit union is not compromised.
For OPEN-END CREDIT (other than home equity) if a program exists to allow consumers to reduce one or more payments during a year, then no notice of a change in terms is required prior to the reduction in payments or resumption of the higher payments. If not explained at account opening then notice is required, and the creditor must give notice prior to resuming the original payment schedule, even though no notice is required prior to the reduction. Iowa Code §537.3205 (Iowa law currently requires a 60 day notice); 12 C.F.R. 1026.9(c)(2)(v) https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/9/ If not explained at account opening, then the modification or change notice requirements of Regulation Z are required. https://www.ncua.gov/files/legal-opinions/OL2005-0903.pdf.
For CLOSED-END CREDIT, Credit unions may allow members to skip payments on consumer loans such as car loans and unsecured personal loans. Iowa Code 537.2503(b) requires the deferred payment to be agreed to in writing with a maximum permissible fee of $30. The agreement with the member may be done electronically. Credit unions should continue to use strong member identification practices to ensure verification of identity.
For OTHER loan modifications, workouts, and extensions may be available for non-consumer loans. Credit unions who charge a fee for these should follow the guidance in Iowa Code Section 537.2502 – 2503 or in accordance with the terms set forth in the loan contracts. Credit unions may need to consult legal counsel based on the complexity of the loan agreement.
DUE DILIGENCE: Each credit union is required to perform its own due diligence regarding skip-a-pay, loan deferment programs, and modifications. Credit unions should continue to use strong member identification practices to ensure verification of identity. Credit unions should carefully document any changes to its program due to the pandemic.
March 27, 2020
Member deposits in all Iowa state-chartered credit unions are insured up to $250,000 per depositor by the National Credit Union Share Insurance Fund. https://www.ncua.gov/newsroom/press-release/2020/deposits-are-safe-federally-insured-credit-unions The Division requests any credit union experiencing unusual cash withdrawal or deposit activity to notify the Division via email:
Chris Kumpf – email@example.com
Prior to enactment, each credit union must submit any board approved change to the credit union’s policies regarding limitations on member deposits and withdrawals. The Division will review each policy on a case-by-case basis with an emphasis on safety and soundness.
March 17, 2020
Iowa credit unions are required to provide notice to the Superintendent at least 60 days prior to ceasing operations at any credit union office*. Due to the current COVID-19 state of emergency, and in accordance with the cited code provisions, the Superintendent is requiring each credit union to notify the Division in writing via email of its intention to cease operations or to limit services at any location in a timeframe that is as practicable as possible. Federally-insured credit unions must also notify the NCUA Regional Director in accordance with 12 C.F.R. 748.1 (b).
* Pursuant to Iowa Code Section 533.301(19) and the corresponding rule found in 189-6.2(533).
The required written notice must be done via email correspondence. No specific form needs to be completed if the change in operations is related to COVID-19. However, each credit union is expected to provide a detailed explanation of where and what restrictions/limitations/closures are being implemented as well as a copy of the correspondence being provided to members. Written communication should be emailed to:
Kevin Gorman – firstname.lastname@example.org