The Federal Financial Institutions Examination Council ("FFIEC") encouraged financial institutions to ease pressure on borrowers as initial loan accommodations in response to the COVID-19 pandemic near their end.
In its Joint Statement on behalf of its members, the FFIEC advised financial institutions to consider effective risk management practices while taking steps to support borrowers, including (i) utilizing risk ratings or grades for loans and (ii) making appropriate accrual status decisions on loans taken out as a result of the pandemic. The FFIEC also recommended that financial institutions work with borrowers who continue to experience financial hardships after initial loan accommodations in order to avoid potential losses for both the borrowers and the financial institutions.
Primary Sources
- FFIEC Joint Statement: Additional Loan Accommodations Related to COVID-19
- FDIC FIL: Additional Loan Accommodations Related to COVID-19 Event
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