TOPIC: Troubled Debt Restructure

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.