Uniform Retail Credit Classification Policy
July 16, 1998
Circular No. 11072

Comments Requested on Proposed Revisions

To the Chief Executive Officers of All State Member Banks in the Second Federal Reserve District:

On July 6, 1998, the Federal Financial Institutions Examination Council (FFIEC) published in the Federal Register a notice and request for comment on proposed revisions to the Uniform Policy for Classification of Consumer Installment Credit Based on Delinquency Status (Uniform Retail Credit Classification Policy) (pdf - 46kb) . Comments to the FFIEC are due by September 4, 1998.

The existing Uniform Retail Credit Classification Policy, which was adopted in June 1980, is a supervisory policy used by the federal regulatory agencies for the uniform classification of retail credit loans of financial institutions. The FFIEC is proposing to revise the charge-off policy for closed-end and open-end credit and address other significant issues in retail credit lending by the financial services industry. The proposed policy will:

  • Establish a charge-off policy for open-end and closed-end credit based on delinquency under one of two possible time frames.
  • Provide guidance for loans affected by bankruptcy, fraud, and death.
  • Broaden the recognition of partial payments that qualify as a full payment.
  • Establish standards for re-aging, extending, deferring, or rewriting past due accounts.
  • Classify certain delinquent residential mortgage and home equity loans.

The FFIEC is requesting comment on all aspects of the proposed policy statement. In addition, the FFIEC also is asking for comment on a number of issues affecting the charge-off policy and will consider the responses before developing the final policy statement.

All comments should be submitted to Keith Todd, Acting Executive Secretary, Federal Financial Institutions Examination Council, 2100 Pennsylvania Avenue NW, Suite 200, Washington, D.C. 20037, or by fax to (202) 634-6556. Comments must be received by September 4, 1998.

If you have any questions concerning these proposed revisions, you may contact, at the Federal Reserve Board, Bill Coen, Supervisory Financial Analyst, (202) 452-5219, or, at this Bank, a member of the portfolio management team responsible for your bank.