Loan Workout Policy
This Loan Workout Policy is for a bank, credit union, fintech company, or other type of financial institution to renegotiate loan terms to assist borrowers who are unable to meet the original terms of their loans, and maximize recovery of loans to these borrowers. Such renegotiation may result in the organization making modifications that result in loan terms it normally would not accept.
Table of Contents
- Purpose and Contents – Topic 1
- Policy Statement – Topic 2
- Current Expected Credit Losses Applicability – Topic 3
- General Appraisal and Collateral Considerations – Topic 4
- Interest Income – Topic 5
- Commercial Real Estate Loan Workout Program – Topic 6
- Agricultural Loan Workout Program – Topic 7
- Residential Real Estate Loan Workout Program – Topic 8
- Loans to One Borrower – Topic 9
- Audit Policy – Topic 10
- Staff Training – Topic 11
- Retention of Documentation – Topic 12
Recent updates to this product:
03/18/24 Update
Eliminate and/or modify references to the term “Troubled Debt Restructuring” (TDR) with a “Borrower Experiencing Financial Difficulty.”
07/17/23 Update
Joint Press Release – Agencies Finalize Policy Statement on Commercial Real Estate Loan Accommodations and Workouts
06/01/23 Update
Eliminate references to allowance for lease and loan losses (ALLL) which was replaced by current expected credit losses (CECL).
09/01/22 Update
OCC Bulletin 2022-20 – Accounting: Bank Advisory Series Updated – Accounting Standards Update (ASU) 2022-02 – “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures”
This Loan Workout Policy (approximately 32 pages) is available to purchase from BankPolicies.com in Microsoft® Word format.
NOTE: The complete contents of this Loan Workout Policy Template are also included in the Non-Accrual and Charged-Off Loan Policy.
Product Update Protection Plan
Ensure your purchase from BankPolicies.com remains current by adding a Product Update Protection Plan to your shopping cart. You’ll automatically receive an updated version via e-mail every time it’s revised, within one year from the last date of purchase.
