>>>‘(1) a commercial loan shall not be placed in non-accrual status solely because the collateral for such loan has deteriorated in value;>>>
Sounds like a good law to me. Take a home mortgage for example. As the house ages it decreases in value. If the home owner can still pay the mortgage, he will own the home at the end of the mortgage payments.
I agree with your assessment - though your logic isn’t always correct. Historically, Houses have appreciated since WWII BUT we’ve had two significant corrections since then that have reset value considerably, then the climb began again
Now I assume this is also true at some level with commercial real estate?
Further - if we didn’t apply this same standard to homes - EVERYONE would loose their homes right now, so why the double standard for commercial real estate? I think this makes sense.