This is the first time I have come across this issue. I am new to this credit union and noted that they are classifying certain credit card loans for which they have made some payment consessions as a TDR and, as we know, once a TDR always a TDR. I do not think they should have been classified as a TDR in the first place. In certain cases, if a borrower is experiencing a temporary financial difficulty, the C.U. will allow the member to make a reduced payment for a period of up to 12 months. The payment amount is enough to cover interest plue $25 principal reduction during the term of the concession. Also, the card is blocked until such time as the member exhibits ability to repay the loan at which time the credit limit may be unblocked. The finance rate is not reduced on the card and no principal is forgiven, only lower payments for 12 months. As a result, there are many accounts listed as TDRs that have had their credit limits restored and have been making timely payments. Thoughts please?
July 1, 2021 - 3:05pm
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