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Bank Regulations and the CARES Act: Loan Modifications, Capital Requirements, Mortgage Forbearance and Servicing

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Tuesday, June 16, 2020

Recorded event now available

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This CLE course will examine various provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that will have a regulatory impact on the banking industry. The panel will discuss removal of the cap on FDIC insured deposits; the OCC waiver of single-borrower lending limits for national banks; reduction of the minimum leverage ratio for community banks; accounting treatment of loan modifications; and application of the new forbearance and mortgage servicing rules.


The CARES Act provides financial and regulatory relief to the financial services industry on several fronts. It includes modification of existing rules regarding capital requirements, lending limits, accounting for loan modifications, and other matters that will give banks greater flexibility in navigating the economic fallout of COVID-19. The Act also includes new mortgage forbearance and servicing protocols. Bank counsel must be conversant with these changes and the periods for which they will be in effect.

Financial institutions may now enter into loan restructuring and forbearance agreements that modify interest rates or defer payments without having to apply GAAP accounting that would treat the effected loans as impaired. Although such modifications must occur by Dec. 31, 2020, they remain valid through the term of the modification. The Act also provides a temporary exemption from the 2016 FASB Accounting Standards relating to the current expected credit loss (CECL) and loans-to-one-borrower limitations applicable to national banks.

The Act includes mortgage forbearance requirements for federally-backed residential mortgages. Servicers must provide a forbearance upon the borrower's request for up to 180 days. No fees, penalties, or interest are chargeable and no information other than the borrower's certification of financial hardship may be required. Interagency guidance and FAQs issued by the CFPB provide further guidance on the application of Act under Regulations X and Z.

Listen as our authoritative panel discusses the bank regulatory provisions of the CARES Act and practical steps financial institutions and mortgage servicers should take now to comply.



  1. CARES Act provisions relating to accounting and capital requirements
    1. Reduction of community bank leverage ratio
    2. Loans-to-one-borrower limitations
    3. Accounting for loan modifications/debt restructurings--suspension of GAAP
    4. Relief from 2016 FASB standards regarding CECL
  2. Mortgage forbearance and servicing under the CARES Act
    1. Forbearance on request
    2. Enforcement of Act under Regulation X and Regulation Z
    3. New flexibility in agency supervision of mortgage servicers
  3. FDIC insured deposits, debt guarantees


The panel will review these and other key questions:

  • How does the CARES Act impact capital requirements and loan loss calculations for banks?
  • For what period are banks given relief from the current FASB Accounting Standards regarding CECL?
  • What mortgage forbearance must be made available for mortgage borrowers? Must it be requested?
  • How have servicing standards been made more flexible under the CARES Act?


Brown, Sanford
Sanford M. Brown

Alston & Bird

Mr. Brown counsels and represents financial institutions and specialty finance companies, as well as their shareholders...  |  Read More

Speier, Ross
Ross M. Speier

Alston & Bird

Mr. Speier practices in the firm’s Financial Services & Products Group. He focuses his practice on securities...  |  Read More

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