Revised Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus

Summary:

The FDIC, the Board of Governors of the Federal Reserve, the Office of the Comptroller of the Currency, the National Credit Union Administration, the Consumer Financial Protection Bureau, in consultation with state financial regulators, issued a revision to the Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus issued on March 22, 2020. The revised interagency statement encourages financial institutions to work constructively with borrowers impacted by the Coronavirus Disease 2019 (referred to as COVID-19), provides additional information regarding loan modifications, and clarifies the interaction between the interagency statement and related relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Statement of Applicability to Institutions with Total Assets under $1 Billion: This Financial Institution Letter (FIL) applies to all FDIC-supervised institutions.

Highlights:

As described in the revised interagency statement, the FDIC:

• Encourages financial institutions to work constructively with borrowers affected by COVID-19;
• Will not criticize institutions for prudent loan modifications; and
• Views prudent loan modification programs to financial institution customers affected by COVID-19 as positive actions that can effectively manage or mitigate adverse impacts on borrowers due to COVID-19, and lead to improved loan performance and reduced credit risk.

The revised interagency statement also:

• Clarifies the interaction between the interagency statement and the optional temporary relief provided in Section 4013 of the CARES Act;
• Provides supervisory views on past due and nonaccrual reporting of loan modification programs; and
• Provides supervisory views on consumer protection considerations.

FIL 22-2020, dated March 22, 2020, has been moved to inactive status.

Suggested Distribution:

FDIC-Supervised Institutions

Suggested Routing:

Chief Executive Officer 
Chief Financial Officer 
Chief Credit Officer 
Board of Directors

Paper copies of FDIC FILs may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).