Expiration of COVID Programs

While we turned the page on the calendar from 2021 to 2022, unfortunately, we have not closed the book on the pandemic and its impact on the banking system. However, the end of 2021 brought with it the expiration of several important COVID relief programs. The following is a quick reminder of the key programs that expired as of December 31, 2021.

• CARES Act Section 4013 provided temporary relief from troubled debt restructuring classification and reporting. Specifically, banks could modify COVID-impacted loans and not classify them as TDRs. Now, banks should return to normal classification and reporting of TDRs when concessions are granted for borrowers experiencing financial difficulty. Extending amortization terms and/or reducing an interest rate below market rates are examples of concessions that could require an institution to classify a credit as a TDR. 
• The minimum Community Bank Leverage Ratio, which was temporarily reduced to 8 percent, returned to its original minimum of 9 percent for first quarter 2022 Call Reports.
• Annual Independent Audits and Reporting Requirements: The FDIC’s interim final rule (FIL 99-2020) providing temporary relief from Part 363 Audit and Reporting requirements for institutions that experienced temporary asset growth due to the Paycheck Protection Program, Paycheck Protection Program Liquidity Facility, Money Market Mutual Liquidity Fund or other factors.

Please reach out to your Richmond Fed Central Point of Contact with any questions.