Banks Poised for Big Win on Loan Losses in Senate’s Virus Bill

(Bloomberg) — The banking industry is close to gaining relief from a much-hated accounting rule imposed after the 2008 financial crisis, thanks to a provision tucked deep in the Senate’s massive coronavirus aid bill.The legislation, which still must be voted on by the House, would likely delay until the end of the year a requirement that lenders partially write down losses when they make a loan –- a directive that banks say paints an unfair picture of their books and could stymie lending, especially during a time of economic tumult.

Lawmakers also added a separate provision that would make it easier for banks to temporarily modify loans without downgrading them to troubled status, a step meant to give flexibility for borrowers under pressure in this pandemic.

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