Federal Reserve Issues Guidance for Dealing with Loan Customers Affected by COVID-19
On March 22, 2020, the Federal Reserve issued a statement to guide banks, credit unions and other financial institutions who may find themselves dealing with loan customers whose businesses are affected by economic conditions arising from COVID-19. The guidance urges financial institutions to offer loan modifications to customers affected by COVID-19 and assures those financial institutions that taking such action will not subject them to negative treatment from a regulatory standpoint. The statement offers financial institutions direction on how to treat these loan modifications from an accounting standpoint and gives some relief on requirements for reporting such loans as past due or on nonaccrual status. A link to the Federal Reserve’s full statement can be found here.