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Regulatory Question and Answer


Question: What type of documentation should financial institutions maintain relative to providing an accommodation to a borrower affected by COVID-19?

Answer: Financial institutions should maintain appropriate documentation that considers borrowers’ payment status prior to being affected by COVID-19, and borrowers’ payment performance according to the changes in terms provided by the payment accommodation. Documentation could also include the borrowers’ recovery plans, sources of repayment, additional advances on existing or new loans, and value of the collateral.

Reference: FDIC Frequently Asked Questions, September 22, 2020

TDR (Troubled Debt Restructuring) Categorization

Question: Will FDIC examiners make banks categorize all loan modifications related to COVID-19 events as a TDR?

Answer: No. The FDIC continues to encourage financial institutions to work with borrowers who may be impacted by COVID-19, by offering to modify, extend, suspend, or defer the repayment terms. FDIC examiners have been directed to exercise significant flexibility in reviewing credits that are impacted by COVID- 19 and will work with financial institutions relative to any reporting issues. Please refer to interagency supervisory guidance,4 which provides more information on TDRs.

Reference: FDIC Frequently Asked Questions, May 27, 2020

Emerging Regulatory Issues

Online Accessibility Act // H.R. 8478

10/01/20 – Introduced in the House by Ted Budd

Key Provisions:

  • Would amend the American with Disabilities Act of 1990 (ADA) to (1) include consumer facing websites and mobile applications owned or operated by a private entity, and (2) establish web accessibility compliance standards for such websites and mobile applications.
  • Would help businesses make their websites compliant with the ADA, which would increase website accessibility for the disabled and reduce the amount of predatory lawsuits filed against businesses.

Required Minimum Distribution Modernization Act // H.R. 8567

10/27/20 – Introduces in the House by Stephanie N. Murphy

Key Provisions:

  • Would increase the age at which required minimum distributions (RMDs) must begin from 72 to 75.
  • Would exempt individuals with account permit states to enact more generous homestead exemptions.