TOPIC: Troubled Debt Restructure

Free Webinar | Loan Modification and Workout Best Practices

Loan Modifications and Workouts: Best Practices for Managing the Process in 2020 and BeyondWednesday, October 14, 2020 at 3:00pm ET

Given the rarity of adverse loans over the last decade, it is not surprise the most common reason for concern at financial institutions relating to loan workouts is inadequate staffing to handle the current influx.

Explore current trends across the country for loan workouts and modifications, the overall outlook, and best practices to manage the process at your institution.

Register here -

    20150911 Troubled Debt Restructuring Policy

    Employee at a credit_union ($121MUSA)

    Loans under adjustment are loans changed within normal underwriting guidelines to accommodate a
    member’s need, typically lowering payments and/or rates to improve the borrower’s financial
    position. Troubled debt restructuring (TDR) is a type of loan adjustment. In a TDR, University and
    Community Federal Credit Union (“UCFCU” or “the Credit Union”) grants the borrower(s) a concession
    that the Credit Union would not otherwise consider, due to economic or legal reasons relative to the
    borrower’s financial difficulties. This concession may either be in the form of an agreement between
    the borrower and the credit union, or between the borrower and court mandate.
    While a TDR may be in the best interest of the member (i.e., financial assistance, avoidance of
    foreclosure or repossession), the Credit Union will enter into a TDR when it is in the best interest of the
    Credit Union.
    To ensure that UCFCU properly recognizes and manages its TDRs, the Credit Union’s Loan department
    will work with the Accounting department on a TDR. The Credit Union will refer to Accounting
    Standards Codification (ASC) 310-40, Troubled Debt Restructurings by Creditors, which provides
    examples of TDRs.