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IPA Seeks Additional Clarifications for Non-Bank Lenders Regarding Previously Issued Loan Modifications from the FDIC

The IPA today joined an industry seeking additional clarifications around loan modifications previously issued by the Federal Deposit Insurance Corporation (FDIC) outlined in an  intended to provide relief to borrowers experiencing financial difficulties resulting from the COVID-19 pandemic.

The letter seeks to clarify whether or not the April 7 FDIC statement allows financial institutions to work with every creditworthy borrower to exercise prudent discretion in modifying terms of their lending arrangements, particularly debt financing extended by commercial banking institutions to non-bank lenders (NBLs) who in turn provide mortgage loan funding to commercial and multifamily property owners of all types.

More specifically, the letter seeks clarification that – in addition to traditional loan products – lending and financing agreements such as warehouse lines and repurchase agreements secured by multifamily and commercial real estate loans, and commercial mortgage-related securities, are within the scope of the previously issued guidance from April 7.

The April 7 FDIC statement extended, among other relief, the below arrangements and clarifications:

  • Encourage financial institutions to work constructively with borrowers affected by COVID-19
  • Will not criticize institutions for prudent loan modifications
  • View prudent loan modifications programs to financial institution customers affected by COVID-19 as positive actions that can effectively manage or mitigate adverse impacts to borrowers due to the current pandemic
  • Clarifies the interaction between the interagency statement and the optional temporary relief provided in Section 4013 of the CARES Act
  • Provides supervisory views on past due and nonaccrual reporting of loan modification programs
  • Provides supervisory views on consumer protection considerations

The IPA aims to ensure all of our members are extended necessary relief and receive clear direction from our regulators, legislators and other government organizations. The letter seeks this additional clarification, and we will continue to proactively communicate timely updates as available.

If you have any questions, please don’t hesitate to reach out to Tony or me.


Anya Coverman
SVP, Government Affairs and General Counsel
Institute for Portfolio Alternatives