ABA Applauds FASB Standard to End TDR Accounting for CECL Adopters, Urges Extension to All Banks

"The new FASB standard to end TDR accounting for Current Expected Credit Loss (CECL) adopters announced today is a major step in the right direction. Accounting for troubled debt restructurings is not only operationally onerous and often confusing to investors, it also is unnecessary under CECL, which requires the lifetime credit loss measurement.

"Even as TDR requirements were suspended due to the CARES Act, banks stepped up and provided meaningful disclosures on the credit quality of borrowers that received loan modifications during the pandemic. With the scheduled 2023 effective date of CECL for all banks fast approaching, ABA calls on FASB to allow banks that haven't yet adopted CECL to also forego TDR accounting for the remainder of the year.  Without this common-sense change, banks will be forced to perform these intense processes only to unravel the treatment several months later.  We urge FASB to take this important step, which would allow banks to focus on serving their customers while better preparing for their CECL adoption."