Loan Performance Categories and Financial Reporting
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Abstract
The Farm Credit Administration (FCA, we, or our) amends our regulatory high-risk loan performance categories by removing "Formally restructured loans (TDR)," also known as troubled debt restructurings. In 2022, changes in generally accepted accounting principles (GAAP) eliminated the accounting guidance for TDRs, enhanced disclosure requirements for certain loan refinancings and restructurings undertaken when a borrower is experiencing financial difficulty and changed existing vintage year disclosure requirements for public business entities. This final rule removes TDRs from our regulatory loan performance categories to reflect changes in GAAP. Because FCA regulations require Farm Credit System (System) institutions to prepare financial statements and reports in accordance with GAAP, retaining TDRs as a regulatory loan performance category is no longer consistent with current accounting standards. In addition to making conforming technical changes, the rule also makes minor technical and organizational revisions to ensure internal consistency within the regulation. In addition, FCA determined that no regulatory amendments are necessary to implement GAAP's enhanced disclosure requirements for loan modifications to borrowers experiencing financial difficulty or for amended vintage year disclosures, as existing FCA regulations already require GAAP-compliant financial reporting.
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<title>Federal Register, Volume 91 Issue 164 (Wednesday, August 26, 2026)</title>
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[Federal Register Volume 91, Number 164 (Wednesday, August 26, 2026)]
[Rules and Regulations]
[Page 54947]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17440]
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FARM CREDIT ADMINISTRATION
12 CFR Part 621
RIN 3052-AD63
Loan Performance Categories and Financial Reporting
AGENCY: Farm Credit Administration.
ACTION: Final rule; confirmation of effective date.
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SUMMARY: The Farm Credit Administration (FCA, we, or our) amends our
regulatory high-risk loan performance categories by removing ``Formally
restructured loans (TDR),'' also known as troubled debt restructurings.
In 2022, changes in generally accepted accounting principles (GAAP)
eliminated the accounting guidance for TDRs, enhanced disclosure
requirements for certain loan refinancings and restructurings
undertaken when a borrower is experiencing financial difficulty and
changed existing vintage year disclosure requirements for public
business entities. This final rule removes TDRs from our regulatory
loan performance categories to reflect changes in GAAP. Because FCA
regulations require Farm Credit System (System) institutions to prepare
financial statements and reports in accordance with GAAP, retaining
TDRs as a regulatory loan performance category is no longer consistent
with current accounting standards. In addition to making conforming
technical changes, the rule also makes minor technical and
organizational revisions to ensure internal consistency within the
regulation. In addition, FCA determined that no regulatory amendments
are necessary to implement GAAP's enhanced disclosure requirements for
loan modifications to borrowers experiencing financial difficulty or
for amended vintage year disclosures, as existing FCA regulations
already require GAAP-compliant financial reporting.
DATES: The final rule was published on July 24, 2026 (91 FR 46703) and
is confirmed as August 24, 2026.
FOR FURTHER INFORMATION CONTACT:
Technical information: Darius Hale, Senior Policy Analyst, Office
of Regulatory Policy, (703) 883-4165, TTY (703) 883-4056,
<a href="/cdn-cgi/l/email-protection#98f0f9f4fdfcd8fefbf9b6fff7ee"><span class="__cf_email__" data-cfemail="e68e878a8382a6808587c8818990">[email protected]</span></a>.
Legal information: Jennifer Cohn, Assistant General Counsel, Office
of General Counsel, (703) 883-4020, TTY (703) 883-4056, <a href="/cdn-cgi/l/email-protection#ceada1a6a0a48ea8adafe0a9a1b8"><span class="__cf_email__" data-cfemail="ec8f83848286ac8a8f8dc28b839a">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: On July 24, 2026, FCA issued a final rule
amending FCA's regulatory high-risk loan performance categories by
removing ``Formally restructured loans (TDR),'' also known as troubled
debt restructurings. In accordance with 12 U.S.C. 2252(c)(1), the final
rule provided the regulation would become effective 30 days after
publication in the Federal Register during which either or both houses
of Congress are in session. Based on the records of the sessions of
Congress, the effective date of the regulation is August 24, 2026.
Ashley Waldron,
Secretary to the Board, Farm Credit Administration.
[FR Doc. 2026-17440 Filed 8-25-26; 8:45 am]
BILLING CODE P
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