Comments due on NCUA proposal to lift ban on interest capitalization

The National Credit Union Administration Board has published [85 FR 78269] a proposed rule for comment that would amend its regulations at 12 CFR 741 by removing the prohibition on the capitalization of interest in connection with loan workouts and modifications. The Board has determined that the current prohibition on authorizing additional advances to finance unpaid interest may be overly burdensome and, in some cases, hamper a federally insured credit union's (FICU's) good-faith efforts to engage in loan workouts with borrowers facing difficulty because of the economic disruption that the COVID-19 pandemic has caused.

Comments on the proposal will be accepted through February 2, 2021.