Read more about the Interagency Statement here.
On March 22, six federal agencies issued the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” to provide additional information to financial institutions that are working with borrowers affected by the new coronavirus disease 2019 (COVID-19).
The Financial Accounting Standards Board (FASB) followed with a press release, “FASB Statement on Prudential Regulator Guidance Concerning Troubled Debt Restructurings,” indicating the “guidance was developed in consultation with the staff of the FASB who concur with this approach and stand ready to assist stakeholders with any questions they may have during this time.”
The agencies are removing barriers to encourage institutions to work proactively with borrowers. As noted in the statement, “The agencies consider such proactive actions to be in the best interest of institutions, their borrowers, and the economy. This approach is consistent with the agencies’ longstanding practice of encouraging financial institutions to assist borrowers in times of natural disaster and other extreme events.”
The statement covers the following:
- Working with customers
- Accounting for loan modifications
- Past due reporting
- Nonaccrual status and charge-offs
- Discount window eligibility
Keep an eye out for additional information as developments occur.