As evidenced by Sunday’s joint announcement from the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), the Consumer Financial Protection Bureau (CFPB), and State Banking Regulators from across the country; the U.S banking system is taking proactive steps to address unique financial impacts that are the byproduct of public health actions taken nationwide to address Covid-19. Lenders are being asked to confirm how loans were performing prior to Covid-19 so clear, documented change in status can be established.
The tolerances and recommendations provided in the Interagency guidance allows lenders to make safe and sound decisions that help borrowers through this difficult period. This includes actions on loans where:
- Borrowers may not be able to meet contractual obligations
- Borrowers may need loan modifications or extensions
- Temporary payment deferrals may be required
Accounting classification and reporting flexibility was outlined in the guidance. It is incumbent on the lender to follow their internal accounting policies and back-up their actions with current and accurate data.