Money & Finance › Government agencies & regulation › The US financial regulators
Interagency CRE loan workout policy statement (2009, updated 2023)
Oct 2009; updated June 2023· Law or rule
Fact, law or dataA rule, statute, definition or measured number.
Regulators' policy telling banks they will not be faulted for prudently restructuring CRE loans with borrowers who can pay.
See it on the Money & Finance map →How it works
The Fed, FDIC, OCC, NCUA and the former Office of Thrift Supervision issued it in October 2009; the four surviving agencies updated it in June 2023. A loan to a borrower able to repay on reasonable terms should not be classified as bad solely because the property's value fell below the balance. Banks must still analyze cash flow, guarantor strength and current value. The 2023 version added short-term accommodations, current loss accounting (CECL) and worked examples, including office loans.
Why it matters
For an owner facing a maturity at higher rates, it gives the bank cover to extend or restructure instead of forcing a sale or foreclosure.
Facts, rules and data
The 2009 and 2023 policy statements published in the Federal Register, the Fed's supervisory letter SR 23-5, and the agencies' joint press releases.
Debates and risks
Whether it eased two downturns or let banks delay losses; how the 2026 wave of office maturities plays out is the next test.
Connections (3)
▸Interagency CRE loan workout policy statement (2009, updated 2023) was issued jointly by The US financial regulatorsFact, law or data
The connection
The policy is joint supervisory guidance, not a regulation. The Fed, FDIC, OCC and NCUA signed it, consulting state regulators, so every bank and credit-union examiner applies the same standard. In 2009 the Office of Thrift Supervision also signed; it was merged into the OCC in 2011.
When and why
Washington, October 2009 during the post-crisis CRE slump, and June 2023 after rising rates hit office values.
How we know
Joint press releases and Federal Register notices from each agency, plus the Fed's supervisory letter SR 23-5.
Debates and risks
Guidance is not binding law, so how closely individual examiners follow its spirit in a tough market varies.
▸Interagency CRE loan workout policy statement (2009, updated 2023) encourages prudent Loan modifications and forbearance agreementsFact, law or data
The connection
It tells banks that prudent modifications are acceptable: extending maturity, cutting the rate, adding interest-only periods, or splitting a loan into a performing A note and a deferred B note. In return the bank must underwrite the borrower afresh, and owners are often asked for a paydown, new reserves or a guarantee.
When and why
Banks nationwide used it in 2009–2012, and again from 2023 as office and other CRE loans matured at higher rates.
How we know
The statements' own worked examples, including multiple-note splits, and banks' disclosures of modified CRE loans in call reports and filings.
Debates and risks
How many modified loans later default anyway; data on outcomes by property type are thin and scattered.
▸Interagency CRE loan workout policy statement (2009, updated 2023) is criticized for enabling 'Extend and pretend': rolling loans over instead of foreclosingExperts disagree
The connection
Because a bank need not call a loan bad just because value fell below the balance, it can extend a struggling loan and hope values recover. Critics say this hides losses and keeps weak buildings alive; supporters say it avoids fire sales, and many 2009-era extensions were eventually repaid.
When and why
First argued over in 2009–2012; revived from 2023 as banks extended maturing office loans rather than foreclose.
How solid is the link?
A 2024 New York Fed staff study found weakly capitalized banks extended maturing CRE loans more often, delaying losses; whether the policy caused this is harder to prove.
Debates and risks
Whether today's extensions buy time for real recovery or only postpone losses on office buildings that will not regain their value.