New York Codes, Rules and Regulations
Title 3 - BANKING
Chapter III - SUPERINTENDENT'S REGULATIONS
Subchapter A - BANKING ORGANIZATIONS
Part 325 - Nonaccrual Of Interest
Section 325.3 - Policy
Current through Register Vol. 46, No. 12, March 20, 2024
(a) A debt will be considered fully secured for the purpose of this section if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt (including accrued interest) in full, or (2) by the guaranty of a financially responsible party.
(b) Loans which reach nonaccrual status may not be restored to accruing status until all delinquent principal and/or interest has been brought current, or the loan becomes fully secured as to both principal and interest. Notwithstanding the foregoing, a loan may be restored to accrual status in accordance with applicable regulatory accounting principles.
(c) The date on which a loan reaches nonaccrual status is determined by the contractual terms of the loan. If a loan reaches nonaccrual status on a date which falls between the dates on which the bank or trust company closes its books, it remains on nonaccrual status until it meets the criteria for restoration to accruing status.
(d) Consumer loans and loans secured by one- to four-family residential properties, on which principal or interest is due and unpaid for 90 days or more, are not required to be placed in nonaccrual status. Such loans should, however, be subject to other alternative methods of evaluation to assure that the institution's net income is not materially overstated.
(e) The reversal of previously accrued but uncollected interest applicable to any asset placed in nonaccrual status, and the treatment of any subsequent payments as either principal or interest, should be handled in accordance with generally accepted accounting principles. Acceptable accounting treatment includes a reversal of all previously accrued but uncollected interest applicable to assets placed in a nonaccrual status against appropriate income and balance sheet accounts.
