A message from CUDA [Update on COVID-19 virus related items]

Hello all,

Thank you for the many queries received as we all monitor carefully the impact of the COVID-19 virus, and it’s potential impact on the credit union business.

It is commendable the important and unprecedented measures that you are implementing to assist with the protection of members, staff and general public health. It is  essential to keep testing the elements of your business continuity plan.

Liquidity Management

It is clear from our continuing engagement with Central Bank of Ireland [CBI] officials on this matter the importance of ensuring remote access to critical processes, services and systems are in place and tested. While your team will be best placed to determine these particular processes, we would draw your attention to the management of liquidity, and the ability to monitor all the triggers remotely [you may have these already in place for Brexit]. Related to this will be ensuring your financial controls for example bank recs, credit, credit control and investments, all continue to be monitored closely to provide you with necessary information on triggers and trends relating to your liquidity management.

Credit Forbearance

Unfortunately, while personal health is paramount, the harsh reality is that the necessary series of measures being taken to reduce the virus impact will have a significant impact on some people and their ability to continue earning, and therefore their capacity to repay their loans. We have, and continue to, engage with the CCR division of the CBI who are currently dealing with a significant number of enquiries from all financial institutions relating to the probability of increased arrears as a result of COVID-19.  CCR Division have indicated that they will publish a communique to all financial institutions including credit unions very soon. CBI have no plan to make any changes to their CCR IT platforms to reflect this possible spike in arrears cases. Following these discussions with CCR Division, CUDA would ask that you please continue to follow the regular “Restructure” process as set out in Section 4.5.3 of Guidance on the Central Credit Register for Credit Information Providers. The financial institution is referenced as the Customer Information Provider (CIP) in this guidance document. This guidance is accessible via your credit union CCR logon on the “private lender pages”.

In our discussions with CCR division a number of considerations emerged that you may wish to consider as you assist members who suffer significant loss of income due to the crisis:

  1. The existing 1-month grace period already contained within CCR eases immediate pressure for borrowers for one month;
  2. Use the most suitable CCR restructure options from Table 4.5.3 “Restructure Event Descriptions”, examples include term extension, suspending interest, interest only, reduce payments, and many more. Should the member and the credit union opt for such an arrangement, this will be confirmed via a signed agreement [new credit agreement] as you are changing the legal contract between the credit union . CUDA recommends that before utilising any of these options, you confirm your system capabilities to provide the option and this includes reporting capability. It is also important that you ensure this also complies with your credit control policy.
  3. It is important to note, and inform, the borrowing member that on agreement of restructure, as per (2) above, the borrower can access  their own  CCR record on CBI CCR and use the 200 character note of explanation as to why they have now missed payments e.g. loss of income due to Covid-19.  For the purpose of CCR the borrower is known as the Customer Information Subject (CIS).

CUDA recommends that you inform borrowers of this CCR option and encourage them to use this facility as the combination of CIP and CIS updates will provide sufficient information as to why a loan restructure has occurred. CIP information will drop off CCR after 2 years.

To assist in determining your approach to forbearance for the genuine cases that present themselves to you, it is important to consider the credit union’s reserve position and the longer-term impact that this crisis might have. While it’s encouraging to see Government support by way of welfare changes, it will be important to consider the credit union’s exposure to the sectors likely to be most impacted and try determine the extent of assistance that can be provided.

Cash management

CUDA have also communicated with both CBI Cash Cycle Division and with An Garda Síochána Head Quarters who have confirmed, that there is no expected change in supply of cash to financial institutions. Cash Cycle Division have indicated that they will issue a communication to us to reassure that cash supplies will remain as normal. They also confirmed to us that they have contingency plans in place and ready to implement if and when required. When we receive formal communication from CBI Cash Division we will circulate it to you. CUDA will remain in regular contact with both Cash Cycle Division and An Garda Síochána and will advise you immediately of any changes to this position.

An important matter that arose in our discussions with the CBI Cash Division, that credit unions should review their contractual and service level agreements with Cash In Transit suppliers to be assured that expected deliveries of cash are maintained during this time. 

Handling Banknotes

In relation to handling coin and banknotes, CUDA is aware that the ECB have indicated that there is no proven evidence to suggest that banknotes pose any additional risk of contracting corona virus, i.e. no more than handling other objects, surfaces etc.  That said, CUDA emphatically reminds you that all staff should continue to follow appropriate hygiene in accordance with HSE guidelines. 

CUDA Training Events

In light of the Government’s request to minimise face-to-face contact CUDA believes it will be best to cancel Training Events that were scheduled for the coming weeks [see table below].  CUDA has also discussed with the CBI our concerns regarding meeting regulatory requirements for mandatory training where events have to be cancelled, e.g. induction training. This will remain under review, and in the meantime CUDA is considering alternative delivery mechanisms to help meet your needs. 

21st March Leadership Masterclass – Credit Union Induction Training
25th March Loan Underwriting – Level 3 – Long Term Lending
28th March Compliance Training – Anti-Money Laundering/Combat Terrorist Financing/Data Protection/Ethics
2nd April Loan Underwriting – Level 4 – Part II – SME Lending
8th  April Loan Underwriting – Level 1 – Introduction to Lending

Extract from Training & Development Progamme 2020 

Board Meetings

It may not be possible to meet mandatory requirements in relation to Board meetings. We have discussed this with the CBI and notified them of our concern. We would encourage that discussions and decisions where they are of upmost importance to your credit union continue through other mediums and are minuted accordingly. To support this, if you click here you will find a Teleconference Policy that will help support remote conference call meetings. This document is also available on CUSP.  You can adapt this document to meet your own needs internally. Please ensure that people logging on for a conference call meeting are supported by your Operational Team as to the mechanisms involved.

Employees

Boards should consider policy decisions around employee remuneration (and what proofs the credit union may require) if:

  • A employee contract the virus;
  • Where the Credit Union directs staff to self-isolate;
  • Where an employee decides to self-isolate [unrelated to the Credit Union instruction], e.g. detailed email required from employee as to the reasons this course of action is deemed required by employee in order for the Credit Union to assess if there is a requirement to tell other employees to self-isolate as a result;
  • Where employees are forced off work for parenting purposes because schools are closed

I would also like to take this opportunity to tell you that CUDA will not be going off line at any point. Should it be necessary to close the CUDA office, testing has been completed to ensure all staff can work remotely from home, including landlines being forwarded to mobile numbers.

We hope the above is of assistance to you and please contact us if you have any queries on the above matters. On behalf of your CUDA team we wish you the very best through this challenging time, regards for now, Kevin