Banking regulators issued a joint statement on June 23rd providing examination guidance outlining supervisory principles to evaluate safety and soundness of regulated financial institutions during the Covid-19 pandemic.
Referencing the initial Declaration of National Emergency, the CARES Act and subsequent updates, the interagency guidance provides an overview of the examination processes and expectations related to Covid-19 actions. The guidance elaborates on impact to real estate secured lending important to Built clients, including the following key topics:
- Examinations will evaluate management’s initial and ongoing risk assessment of pandemic related risks.
- Examinations will assess risk identification and reporting of impacted assets and markets.
- Examinations will apply credit classification standards while recognizing Covid related constraints but focus on management ability to identify loans substantially affected by the pandemic and recognize deterioration quickly.
The guidance is attached via link HERE