Skip to main content
OCC Flag

An official website of the United States government

Problem Loans

Banks manage problem loans through loan workouts. Loan workouts can take a number of forms: simple renewal or extension of the loan terms; extension of additional credit; formal restructuring of the loan terms with or without concessions; or, in some cases, foreclosure on underlying collateral. Banks should choose the alternative that will maximize the recovery and minimize the risk on each troubled loan.


Guidelines for Collateral Evaluation and Classification of Troubled Energy Loans (Supplement 1) (EC 223-S1, June 1986)
Addresses concerns regarding the flexibility and examiner judgment supplanted to a degree by the guidelines in EC 223, August 1984

Guidance on Prudent CRE Loan Workouts (OCC 2009-32, October 2009), Policy Statement
Provides guidance on risk management practices for loan workouts within a framework of financial accuracy, transparency, and timely loss recognition

Troubled Loan Workouts and Loans to Borrowers in Troubled Industries (BC 255, July 1991)
Covers the various types of loan workouts and accurate reporting of troubled loans