The Federal Financial Institutions Examination Council (FFIEC) is seeking comment on the attached "Uniform Retail Credit Classification Policy," a guide for banks and bank regulators in classifying a consumer loan that is not being repaid under its original loan terms. The proposal updates the classification policy for open-end and closed-end credit issued in 1980. The regulators are seeking specific comments on two alternative options for classifying open-end and closed-end retail loans. Option one would charge off delinquent retail loans if they are past due 150 days or more from the contractual due date. Option two, which is similar to the existing policy, would charge off delinquent closed-end retail loans that are past due 120 cumulative days and delinquent open-end retail loans that are past due 180 cumulative days. The attached also includes the following proposed new guidance:
The proposed policy also details criteria that must be met before banks and thrifts may consider a delinquent open-end account current, such as account re-aging, and extending, deferring and rewriting delinquent closed-end loans. These changes are being proposed by the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Office of Thrift Supervision as members of the FFIEC. Comments are due by September 4, 1998, to the Executive Secretary, FFIEC, 2100 Pennsylvania Ave., NW, Suite 200, Washington, DC 20037. Comments may also be faxed to (202) 634-6556. For further information, please call James Leitner, FDIC Examination Specialist, on (202) 898-6790 or Michael Phillips, FDIC Counsel, on (202) 898-3581.
Attachment: July 6, 1998 Federal Register, pages 36403-36408 Distribution: FDIC-Supervised Banks (Commercial and Savings) NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or (703) 562-2200). |