A troubled debt restructuring was a modification in which a lender granted a concession to a borrower experiencing financial difficulty that it would not otherwise have considered — a rate reduction, a term extension, or principal forgiveness. The TDR designation no longer exists for institutions that have adopted CECL. FASB’s ASU 2022-02 eliminated the separate TDR accounting model and replaced it with enhanced disclosure of modifications made to borrowers experiencing financial difficulty, effective for fiscal years beginning after December 15, 2022.
The vocabulary still lags the standard: bankers, examiners, and loan documents continue to say “TDR” years after the model was retired. What changed in practice is that a concession no longer triggers separate TDR measurement — the loan is measured within the CECL allowance like any other — but modifications to borrowers in financial difficulty must still be identified, tracked, and disclosed. See CECL and loan workouts.
Why credits like this reach a workout desk: bank noncurrent commercial real-estate loans have risen while reserve coverage slips at community banks (FDIC Quarterly Banking Profile), and roughly $957 billion of commercial and multifamily mortgage debt was scheduled to mature in 2025 — against a total market of about $4.8–5.0 trillion, ~38% of it held by banks and thrifts (Mortgage Bankers Association). See the CRE distress statistics hub for the full figures and sources.
Primary sources: FDIC Quarterly Banking Profile, Mortgage Bankers Association, and interagency (FDIC / OCC / Federal Reserve) guidance on CRE loan accommodations and workouts. Figures are directional and updated periodically; confirm the latest release before relying on a specific number.
The separate TDR designation is gone, and the 2023 interagency policy statement on CRE loan accommodations and workouts confirms that examiners will not criticize prudent, well-documented workout arrangements. Disclosure obligations for modifications to borrowers in financial difficulty remain.
Disclosure of modifications to borrowers experiencing financial difficulty — by type of concession, with performance tracking for twelve months following the modification — along with vintage disclosure of gross write-offs.
Frequently. A modification postpones a resolution rather than completing one, and a sale converts the remaining uncertainty to cash. Request a confidential review.