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COVID payment deferments?

  • 1.  COVID payment deferments?

    Posted Sep 15, 2020 10:29 AM
    Good afternoon,
    Has anyone given COVID-19 deferments on consumer loans past 6 months (i.e. more than 180 days of payment relief)?
    If yes, what were the criteria to be considered ? What documentation was requested to be provided by the borrowers?  Did you require an interim payment? For instance, 90 days skip, 1 payment required, additional 90 days skip.
    Scott Meyer
    President & CEO
    Connect Credit Union
    954-318-1270 direct
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  • 2.  RE: COVID payment deferments?

    Posted Oct 28, 2020 08:47 AM

    Hi Scott,

    We offered 1-3 month deferments. If a member asks for additional assistance after the first deferment, we require documentation to confirm they've been affected by COVID-19 (paystub with reduced YTD income etc). For industries we know were affected we may waive the documentation request. We consider when they can start making payments again and may set up interest only or reduced payments temporarily for those transitioning back to work. If they have a permanent income reduction, we'll consider a loan modification.

    Cathy Hufstetler CCUE, CUBLP
    121 Financial CU
    Jacksonville FL

  • 3.  RE: COVID payment deferments?

    Posted Oct 29, 2020 10:45 AM
    We offered two options.  We offered payment extension or payment deferral:

    1) Payment extension is our normal "Skip A Pay" program modified to meet the needs of the pandemic.  We are limited by state regs here.  Therefore, what we did was we gave a 2 month extension.  After that extension was over, member was required to make a payment.  After they made that payment, we allowed them to take another 2 month extension.  That is because in state regs you can extend an installment loan twice over the life of the loan, but not for more than 2 payments at each extension.  This allowed members to basically just make one payment over a period of 5 months.
    2) Payment deferral.  We offered a payment deferral where member could skip 3 payments but at the end of the 3 months all missed payments and interest were due in full.  We offered members an unsecured loan at the end of the deferral at the same rate as their deferred loan for the amount of the 3 missed payments.  We then applied the proceeds of that loan to the deferred loan.  The unsecured loan is then to be repaid over the next 12 to 24 months with first payment not due for up to 90 days.

    Frankly, with stimulus and extra $600/300 unemployment, this was all we really needed to do and we have not seen a spike in charge offs or delinquencies.  We've been fortunate that none of our major employers have been impacted as harshly as some like travel/leisure.

    David Ness
    Merco Credit Union
    Merced CA