NCUA recently issued Letter to Credit Union 08-CU-13, which warns federally-insured credit unions about the environmental risk that exists in real estate lending. In NCUA's words:
The purpose of this letter is to inform all federally insured credit unions of potential liability to your members, and possibly to the credit union, when environmental contamination is discovered on real property financed by the credit union. While environmental liability can occur with any real estate secured loan, it is generally more likely to occur with non-residential real estate (i.e., commercial use properties). All credit unions granting real estate secured loans need to be aware of this issue and credit unions granting member business loans secured by real estate should establish policies and procedures to help ensure liability in this regard is minimized.
The letter has two nice attachments that provide detailed guidance. And here's a thought: if your credit union is thinking about a merger, it might make sense to measure the "environmental risk" of the new properties you'll be acquiring.
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All good things come to an end. Mediocre things may even end sooner. Case in point: the 2008 NAFCU Softball Team. We entered the playoffs with high hopes, but left quickly after being swept. We ended the season with a 6-14 record. Obviously, we were a much better team than our record.
Obviously.
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