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1 1 (January 11, 2021)

handle is hein.crs/govebkd0001 and id is 1 raw text is: Congressional A Research Service CARES Act Bank and Credit Union Relief: Expirations and Extensions Under P.L. 116-260 January 11, 2021 The economic effects of the Coronavirus Disease 2019 (COVID-19) pandemic may cause numerous borrowers to miss loan repayments, potentially leading to distress at banks and credit unions. As part of Congress's response, DivisionAof the CARES Act (P.L. 116-136) included six sections-4008, 4011, 4012, 4013, 4014, and 4016-that either temporarily relaxed regulations facing banks and credit unions or provided regulators additional temporary authorities to support those institutions and their lending. Those sections are examined in CRS Insight IN11318, The CARESAct (PL. 116-136): Provisions Designed to Help Banks and Credit Unions, and CRS Insight IN11307, The CARESAct (PL. 116-136) Section 4008: FDIC Bank Debt Guarantee Authority. This Insight identifies which provisions were extended by the Consolidated Appropriations Act, 2021 (P.L. 116-260); which provisions expired; and the possible implications of those extensions and expirations. As enacted, the CARES Act provisions would have expired on the earlier of (1) the termination date of the COVID-19 national emergency declared by the President on March 13, 2020, under the National Emergencies Act (P.L. 94-412) or (2) the end of 2020. P.L. 116-260, Division N, Sections 540 and 541, extended the expiration date of CARES Act Sections 4013, 4014, and 4016 until the earlier of the emergency termination date or the end of 2021. The act did not extend Sections 4008, 4011, and 4012, and they expired on December 31, 2020. Extended Provisions Section 4013 requires federal bank and credit union regulators to allow lenders to suspend the Generally Accepted Accounting Principles requirements for recognizing any potential COVID-related losses from a troubled debt restructuring loan modification. Section 4014 gives banks and credit unions the option to temporarily delay the implementation of the Current Expected Credit Loss (CECL) accounting standard, a newly adopted methodology used in accounting for future loan losses. (On August 26, 2020, the bank regulators finalized a rule allowing banks to delay CECL's adoption for up to two years, longer than the Section 4014 mandate.) Extending these accounting provisions permits banks to delay (1) recognizing certain losses as they accommodate borrowers and (2) incurring the costs of making an accounting switch during the pandemic. If the effects Congressional Research Service https://crsreports.congress.gov IN11568 CRS INSIGHT Prepared for Membersand Committeesof Congress

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