This policy statement, adopted by each of the financial regulators, provides guidance for examiners and financial institutions that are working with commercial real estate (CRE) borrowers who are experiencing diminished operating cash flows, depreciated collateral values, or prolonged delays in selling or renting commercial properties.

This policy statement details risk-management practices for loan workouts that support prudent and pragmatic credit and business decisionmaking.

Financial institutions that implement loan workouts for CRE as inidicated in this policy statement will not be subject to criticism for engaging in CRE loans, even if restructured loans have weaknesses and poor ratings. In addition, the credit rating for reviewed loans will not be lowered if solely the value of the collateral declines.