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Agencies encourage FIs to work with borrowers affected by COVID-19

by Cornerstone Credit Union League | Mar 25, 2020

The federal financial institution regulatory agencies and state banking regulators have issued an interagency statement encouraging financial institutions (FIs) to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications.

The agencies encourage FIs to work with borrowers, will not criticize institutions for doing so in a safe and sound manner, and will not direct supervised institutions to automatically categorize loan modifications as troubled debt restructurings (TDRs). The joint statement also provides supervisory views on past-due and nonaccrual regulatory reporting of loan modification programs.

The agencies view prudent loan modification programs offered to FI customers affected by COVID-19 as positive and proactive actions that can manage or mitigate adverse impacts on borrowers and lead to improved loan performance and reduced credit risk. 

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