Non-Accrual and Charged-Off Loan Policy
This Non-Accrual and Charged-Off Loan Policy addresses the classification and accounting treatment of non-accrual and charged-off loans of a bank, credit union, fintech company, or other type of financial institution to make every reasonable effort to collect all principal and interest due on every loan granted. Before a loan is placed on non-accrual or is charged-off, lending personnel are to make every possible attempt at collection.
Table of Contents
- Purpose and Contents – Topic 1
- Policy Statement – Topic 2
- Special Assets Committee – Topic 3
- Uniform Policy Guidelines – Topic 4
- Problem Loan Guidelines – Topic 5
- Problem Loan Identification Procedures – Topic 6
- Current Expected Credit Losses Applicability – Topic 7
- Loan Workout Programs – Topic 8
- Watch List Addition Procedures – Topic 9
- Non-Accrual Loans – Regulatory Accounting Treatment – Topic 10
- Charged-Off Loans – Topic 11
- Collection and Debt Sale Arrangements – Topic 12
- Audit Policy – Topic 13
- Staff Training – Topic 14
- Retention of Documentation – Topic 15
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 Non-Accrual and Charged-Off Loan Policy (approximately 51 pages) is available to purchase from BankPolicies.com in Microsoft® Word format.
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