Impact on members:

  • Reduced or zero earnings
  • Live off savings
  • Savings may be low and further offset by health costs
  • Inability to make loan payments

Impact on credit union:

  • Increased non-performing loans
  • Reduced loan interest income
  • Increase in loan loss provisioning
  • Reduction in capital position
  • Liquidity issues (Savings withdrawals) • Negative impact on growth

Regulator response:

  • Credit Unions Implementation of COVID- 19 Action Plan .
  • Accommodation of changes to CU’soperating hours
  • Allow Board and Committee Meetings to be held virtually
  • Extensions to hosting of AGM’s and filing statutory reports for a period of 6 months.
  • Working with CU’s on their AML/CFT Risk Assessments
  • Ongoing consultations with the League re the Covid -19 Protocols implemented by the Sector.
  • Discussions on possibility of hosting virtual AGM’s
  • Discussions are ongoing with respect to possibility of an interim Dividend to members
  • Strategic Focus on Governance of theCU’s

International Standard-setting bodies response:

  • Basel Committee: 1 Year delay in Basel III
  • IASB extended exemption for applying IFRS 9 to Jan 1, 2023

Staffing Component:

  • Restructuring of work programe of examiners in line with critical sector supervision
  • Rotation of staff to accommodate queries and facilitate physical presence at the office.
  • Review and assess COVID 19 potential impact on Credit Unions Stress test using various scenarios and assess impact on financial health and stability .

Further considerations:

  • Capital Adequacy Ratio- Change risk for certain loans
  • Ring fence loan losses as a result of pandemic• Forbearances:
    • –  Loan refinancing
    • –  Capital requirement
    • –  Loan delinquency (90 to 150 days)

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