The Federal Reserve, FDIC and Office of the Comptroller of the Currency today issued a joint notice stating that they are moving forward with a proposal to swap out references to troubled debt restructurings with “modifications to borrowers experiencing financial difficulty,” or FDMs, in call report and FFIEC 002 forms. However, the agencies also announced they will take more time to consider controversial revisions related to the length of time that FDMs must be reported in the call report, as well as the reporting of past-due loans, both of which the American Bankers Association had raised concerns about.
Last year, the three agencies proposed revisions to call reports to address previous changes in accounting that eliminated troubled debt restructurings. In the notice, the agencies said they plan to adopt that and other revisions to call report and FFIEC 002 forms. But in a change from the original proposal, the agencies said they will continue to consider revisions regarding the reporting of FDMs, past-due loans and long-term debt requirements. They also reopened the proposal to public comment.
In a letter last year, ABA said it supported the proposal’s changes to address the elimination of TDRs and conform to U.S. generally accepted accounting principles, or GAAP, reporting standards for FDMs. However, the association said the proposed additional non-GAAP reporting requirements for FDMs did not align with the agencies’ stated objectives and would impose significant costs and burdens on banks.
