Pryor Cashman assisted the New York League of Independent Bankers (NYLIB) in drafting a letter to sitting members of Congress, the federal prudential banking agencies, and the Financial Standards Accounting Board (FASB) recommending that additional accounting relief be provided to community and other banks. Specifically, while Section 4013 of the CARES Act specifies that certain COVID-19 related loan modifications do not constitute troubled debt restructurings (TDRs), that relief is set to expire by year-end or even earlier.  While the banking agencies and FASB also have provided banks with TDR relief, that relief is limited to “short-term” loan modifications.  In light of the continuing adverse economic effects of COVID-19 on small businesses and other borrowers, NYLIB’s letter recommends the extension and expansion of existing statutory and regulatory relief on accounting for TDRs.

Partner Pinchus D. Raice co-chair of the Financial Institutions Group, and Dustin N. Nofziger, an associate in the Financial Institutions Group, represented NYLIB in the submission of its letter on a pro bono basis.