Advisories
Advisory 7
Loan Delinquency Follow-up
We released Advisory 7 in April 1998 and at that
time issued parameters at which time CUDIC's Analysts
would determine the seriousness and degree of follow-up
required if delinquency passed certain thresholds.
We have seen tremendous improvement in system delinquency
totals with over 30 day as at December 31, 2002,
of 1.69% and over 90 day of 0.47%. The statistics
for February 2003 shows only 2 of 39 credit unions
exceeding the standard of 4% over 30 days and only
3 of 39 credit unions exceeding 2% over 90 days.
These are predominately very small credit unions
where individual accounts can cause large swings.
After consultation with the Superintendent's office
and Credit Union Central of Nova Scotia, we are
revising the parameters to the following limits:
- The Analyst will contact the credit union's
General Manager to obtain the reason(s) for the
delinquency and the action being taken to address
the situation when:
- a credit union reaches loan delinquency
over 30 days in excess of 2 %; and/or
- loan delinquency over 30 days increases
more than 1.0% over the previous month and/or
quarter.
- The Analyst may contact the credit union to
assess the adequacy of the collection practices
and procedures in place when:
- loan delinquency over 30 days exceeds 3%;
and/or
- loan delinquency over 90 days exceeds 1.5%.
CUDIC will require the credit union to provide
a written response on the action it will undertake
to address the problem accounts and may consider
placing a credit union on the Early Warning List.
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