Acting OCC Comptroller Responds to NYLIB TDR Letter

On July 6, 2020, NYLIB President Ed Lutz sent a letter to members of Congress, the prudential banking agencies, and the Financial Standards Accounting Board (“FASB”) concerning accounting for troubled debt restructurings (“TDRs”) in light of the COVID-19 pandemic. On August 7, 2020, Acting Comptroller of the Currency Brian Brooks responded in a letter thanking NYLIB for offering its recommendations for COVID-19-related legislative and regulatory action regarding TDRs. Acting Comptroller Brooks noted that some relief requested by NYLIB’s letter, which had also been addressed to members of Congress, was not within the OCC’s authority to effect. He also highlighted OCC Bulletin 2013-26, “Troubled Debt Restructurings: Guidance on Certain Issues Related to Troubled Debt Restructurings,” as well as the August 3, 2020 “Joint Statement on Additional Loan Modifications Related to COVID-19,” and noted that U.S. Generally Accepted Accounting Principles (“GAAP”) require financial institutions to maintain appropriate allowances for loan and lease losses (“ALLLs”) or allowances for credit losses (“ACLs”), as appropriate, regardless of TDR designation.