A group of 35 Republican members of Congress sent a letter to congressional leadership on Friday calling for the extension of the troubled debt restructuring provisions in the CARES act that allow banks to suspend the requirements under generally accepted accounting principles for loan modifications related to COVID-19 that would otherwise be categorized as TDRs.
Section 4013 of the CARES Act currently suspends TDR classification of loans until Dec. 31. The lawmakers noted that allowing the provision to expire “would have a drastic and adverse impact on the ability of consumers and businesses to access credit now and a TDR classification would further hurt their ability to access credit in the future.”
They added that the provision has allowed financial institutions, particularly those holding commercial mortgages, to modify COVID-19 affected loans, substantially increasing the capability of those institution to work with customers to recover from the shutdowns.
