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OCC Bulletin 2013-26 | October 24, 2013

Troubled Debt Restructurings: Guidance on Certain Issues Related to Troubled Debt Restructurings


Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies of Foreign Banks; Department and Division Heads; All Examining Personnel; and Other Interested Parties


The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) have jointly issued the attached supervisory guidance on certain issues related to commercial and residential real estate loans that have undergone troubled debt restructurings (TDRs). This guidance applies to all national banks, federal savings associations, and federal branches and agencies of foreign banks (collectively, banks).


This guidance reiterates key aspects of previously issued regulatory guidance and discusses the definition of collateral-dependent loans and the circumstances under which a charge-off is required for TDRs. The guidance also elaborates on the concept of “operation of collateral” for repayment. The agencies continue to view prudent modifications as positive actions when they mitigate credit risk, and will not criticize banks for engaging in prudent workout arrangements, even if the modified loans result in TDRs.

Note for Community Banks

This guidance is applicable to community banks.

Further Information

Any questions regarding the 2013 guidance should be directed to Joy Palmer, Senior Accounting Policy Advisor, Office of the Chief Accountant, at (415) 396-5892; or Lou Ann Francis, National Bank Examiner and Technical Expert, Credit Risk Policy Division, at (202) 649-6406 or (202) 649-6280.


Kathy Murphy
Deputy Comptroller and Chief Accountant


Darrin Benhart
Deputy Comptroller for Credit and Market Risk

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