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Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
National Credit Union Administration
Office of the Comptroller of the Currency
Consumer Financial Protection Bureau
Conference of State Bank Supervisors
March 22, 2020

Interagency Statement on Loan Modifications and Reporting for Financial Institutions
Working with Customers Affected by the Coronavirus
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 the
State Banking Regulators (hereafter, the agencies), are issuing this interagency statement to
provide additional information to financial institutions who are working with borrowers affected
by the Coronavirus Disease 2019 (also referred to as COVID-19). The United States has been
operating under a presidentially declared emergency since March 13, 2020, and financial
institutions and their customers are affected by COVID-19. The agencies understand that this
unique and evolving situation could pose temporary business disruptions and challenges that
affect banks, credit unions, businesses, borrowers, and the economy. The agencies will continue
to communicate with the industry as this situation unfolds, including through additional
statements, webinars, frequently asked questions, and other means, as appropriate.
Working with Customers
The agencies encourage financial institutions to work prudently with borrowers who are or may
be unable to meet their contractual payment obligations because of the effects of COVID-19.
The agencies view loan modification programs as positive actions that can mitigate adverse
affects on borrowers due to COVID-19. The agencies will not criticize institutions for working
with borrowers and will not direct supervised institutions to automatically categorize all COVID19 related loan modifications as troubled debt restructurings (TDRs).
The agencies will not criticize financial institutions that mitigate credit risk through prudent
actions consistent with safe and sound practices. 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 agencies also will not
criticize institutions that work with borrowers as part of a risk mitigation strategy intended to
improve an existing non-pass loan.

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Accounting for Loan Modifications
Modifications of loan terms do not automatically result in TDRs. According to U.S. GAAP, a
restructuring of a debt constitutes a TDR if the creditor, for economic or legal reasons related to
the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise
consider. 1 The agencies have confirmed with staff of the Financial Accounting Standards Board
(FASB) that short-term modifications made on a good faith basis in response to COVID-19 to
borrowers who were current prior to any relief, are not TDRs. This includes short-term (e.g., six
months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or
other delays in payment that are insignificant. 2 Borrowers considered current are those that are
less than 30 days past due on their contractual payments at the time a modification program is
implemented.
Working with borrowers that are current on existing loans, either individually or as part of a
program for creditworthy borrowers who are experiencing short-term financial or operational
problems as a result of COVID-19, generally would not be considered TDRs. For modification
programs designed to provide temporary relief for current borrowers affected by COVID-19,
financial institutions may presume that borrowers that are current on payments are not
experiencing financial difficulties at the time of the modification for purposes of determining
TDR status, and thus no further TDR analysis is required for each loan modification in the
program.
Modification or deferral programs mandated by the federal or a state government related to
COVID-19 would not be in the scope of ASC 310-40, e.g., a state program that requires all
institutions within that state to suspend mortgage payments for a specified period.
The agencies’ examiners will exercise judgment in reviewing loan modifications, including
TDRs, and will not automatically adversely risk rate credits that are affected by COVID-19,
including those considered TDRs. Regardless of whether modifications result in loans that are
considered TDRs or are adversely classified, agency examiners will not criticize prudent efforts
to modify the terms on existing loans to affected customers.
In addition, the FRB, the FDIC, and the OCC note that efforts to work with borrowers of one-tofour family residential mortgages as described in the modification section of this document,
where the loans are prudently underwritten, and not past due or carried in nonaccrual status, will

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The TDR designation is an accounting categorization, as promulgated by the FASB and codified within
Accounting Standards Codification (ASC) Subtopic 310-40, Receivables – Troubled Debt Restructurings by
Creditors (ASC 310-40).

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According to ASC 310-40, factors to be considered in making this determination, which could be qualitative, are
whether the amount of delayed restructured payments is insignificant relative to the unpaid principal or collateral
value of the debt, thereby resulting in an insignificant shortfall in the contractual amount due from the borrower, and
whether the delay in timing of the restructured payment period is insignificant relative to the frequency of payments
due under the debt, the debt’s original contractual maturity, or the debt’s original expected duration.

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not result in the loans being considered restructured or modified for the purposes of their
respective risk-based capital rules. 3
Past Due Reporting
With regard to loans not otherwise reportable as past due, financial institutions are not expected
to designate loans with deferrals granted due to COVID-19 as past due because of the deferral.
A loan’s payment date is governed by the due date stipulated in the legal loan documents. If a
financial institution agrees to a payment deferral, this may result in no contractual payments
being past due, and these loans are not considered past due during the period of the deferral. 4
Nonaccrual Status and Charge-offs
Each financial institution should refer to the applicable regulatory reporting instructions, as well
as its internal accounting policies, to determine if loans to stressed borrowers should be reported
as nonaccrual assets in regulatory reports. However, during the short-term arrangements
discussed in this statement, these loans generally should not be reported as nonaccrual. As more
information becomes available indicating a specific loan will not be repaid, institutions should
refer to the charge-off guidance in the instructions for the Consolidated Reports of Condition and
Income. 5
Discount Window Eligibility
Institutions are reminded that loans that have been restructured as described under this statement
will continue to be eligible as collateral at the FRB’s discount window based on the usual
criteria.

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Although NCUA’s Risk-Based Capital rule does not go into effect until January 1, 2022, the NCUA agrees with
the language in this guidance regarding working with borrowers of one-to-four family residential mortgages.
4
This applies for risk-based capital purposes as well. In addition, the underlying exposure of a securitization would
not be considered past due or to have contractually deferred payments under 12 CFR 3.43(b)(2) or 12 CFR
3.144(b)(2) (OCC), 12 CFR 217.43(b)(2) or 12 CFR 217.144(b) (FRB), or 12 CFR 324.43(b)(2) or 12 CFR
324.144(b)(2) (FDIC) due solely to such a payment deferral.
5

For federally insured credit unions, refer to NCUA LCU 03-CU-01.

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102