---
title: "What the tape said: modified, and not paying"
url: https://lendriskanalytics.com/insights/modified-and-not-paying.html
publisher: LendRisk Analytics
published: 2026-09-15
kind: Article
description: "Every federally insured credit union files one line for loans it has modified for borrowers in trouble, and since 2024 a second line for the modified loans that are already late again. The first has more than doubled since the definition changed. One dollar in four on it is not paying. What the line says about next year's charge-offs, where it says nothing, and who leaves it blank. Every figure rebuilt from the raw NCUA archives; inferences labeled."
html: https://lendriskanalytics.com/insights/modified-and-not-paying.html
---

# What the tape said: modified, and not paying

[← All insights](https://lendriskanalytics.com/articles.html)

What the Tape Said · Issue 14
Research brief · 13 min read

Credit unions · NCUA 5300 · Loan modifications

# Modified, and not paying.

NCUA 5300 call reports, March 2023 to March 2026 · Public record through September 15, 2026 · LendRisk Analytics

Issue 13 read the extension field on securitized auto loans and found that every lender resets the clock, and that what happens in the six months after is the number that separates them. Credit unions file something stricter. One line on the 5300 carries every loan a credit union has modified for a borrower in financial difficulty, held on the line for twelve months. Since 2024 a second line carries the part of that book that is already late again under its new terms. So the filing answers the question the securitization tapes made me work for. The modified book has more than doubled since the definition changed in 2023. One dollar in four on it is not paying. And the line tells you something specific, narrower than I expected, about which delinquent books are going to lose money next year.

$10.2B

Loans modified for borrowers in difficulty, March 2026, up from $4.4B when the definition changed

25%

Of that balance already 30+ days late or in nonaccrual under the modified terms

3.2×

Next-year charge-offs, top quartile of modifiers against credit unions reporting none

9 of 9

Annual cohorts since the definition changed with the same ordering at the top

## Bottom line

Here is the exercise. Take every federally insured credit union with at least $10 million of loans in both March 2025 and March 2026. That is 2,942 of them. Rank the ones reporting a nonzero modified balance by that balance as a share of total loans, cut them into quartiles, and put the 962 reporting nothing in their own group. Then wait a year and measure net charge-offs on the whole book.

| Group, March 2025 | n | Median modified / loans | Delinquency, March 2025 | Charge-offs, year to March 2025 | Charge-offs, year to March 2026 |
|---|---|---|---|---|---|
| Reports none | 962 | 0.000% | 0.548% | 0.421% | 0.416% |
| Quartile 1 | 495 | 0.026% | 0.566% | 0.559% | 0.615% |
| Quartile 2 | 495 | 0.098% | 0.674% | 0.661% | 0.604% |
| Quartile 3 | 495 | 0.230% | 0.765% | 0.685% | 0.692% |
| Quartile 4 | 495 | 0.799% | 1.168% | 1.375% | 1.325% |

Charge-offs and delinquency are dollar-weighted within group: total net charge-offs over total loans, annualized. Quartiles are set among reporters; the top quartile begins at about 0.44% of loans. Every figure in this brief was rebuilt from the raw NCUA archives for publication.

Read the two right-hand columns together. The top quartile charged off 1.325% over the following year, three times the non-reporters. It had also charged off 1.375% in the year before it was ranked. So this is not the finding from Issue 12, where a full lot predicted losses a board could not yet see. The modified line does not run ahead of the losses. It sits on top of them. The question is what it adds once you already know that, and the answer is in Section III.

The read
The 5300 modification line is a workout book, filed quarterly, with its own redefault rate attached. Twelve months of modifications, and the share already late again. **Three things are true about it at once.** It has more than doubled in three years. It is concentrated in a few hundred institutions. And in a book whose delinquency is already above the median, the size of it tells you which credit unions lose twice as much as their peers.

## I · What the line is, and when it changed

Schedule A, Section 2, item 26 of the [Form 5300](https://ncua.gov/files/publications/regulations/call-report-form-march-2025.pdf): Account 1001F, total outstanding troubled debt restructured loans or modifications to borrowers experiencing financial difficulty. The [instructions](https://ncua.gov/files/publications/regulations/call-report-instructions-september-2025.pdf) say what goes there for a credit union that has adopted CECL: "the number and amortized cost of loan modifications resulting in a new loan or a continuation of the current loan. Report modifications for 12 months from the modification date or until the loan is paid off, charged-off, sold, or otherwise settled. Any subsequent modification resets the timeline." Modifications count if they take the form of "principal forgiveness, an interest rate reduction, a significant payment delay, or a term extension (or a combination thereof)."

Item 27, Accounts DL0148 and DL0149, added in March 2024: "the number and dollar amount of modified loans to borrowers experiencing financial difficulty and, under their modified repayment terms, are past due 30 days or more or are in nonaccrual status." That is a redefault line. The securitization tapes in Issue 13 made me follow each extended loan forward six months to get it. Here the credit union files it.

Before CECL the same account held troubled debt restructurings under the old accounting definition. [ASU 2022-02](https://dart.deloitte.com/USDART/home/publications/deloitte/heads-up/2022/fasb-issues-asc-326-update) removed the TDR concept for CECL adopters, most credit unions adopted at the start of 2023, and the system total dropped from $7.3 billion in December 2022 to $4.4 billion in March 2023 as the definition changed underneath it. Nothing in this brief compares a number after that line to a number before it.

Chart 1 · The modified book since the definition changed

Account 1001F summed across all federally insured credit unions, March 2023 to March 2026. From March 2024 the dark portion is Account DL0149, the modified balance already 30+ days late or in nonaccrual.

$4.41B at March 2023, $10.95B at December 2025, $10.15B at March 2026. As a share of total loans: 0.288% to 0.587%. System delinquency over the same span: 0.525% to 0.845%. Source files: FS220H and FS220P in each quarterly archive at [ncua.gov](https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data).

Two and a half times in three years, against delinquency up 1.6 times. The December 2025 reading is the highest for this account since the series began in 2016, and the only readings above it were TDR balances under the old, broader definition. Whether that is more members in trouble or more credit unions working with them is not something the line can settle. What it can settle is what came next for the loans on it.

## II · One in four is late again

Of the $10.15 billion modified at March 2026, $2.56 billion was already 30 or more days past due or in nonaccrual under the modified terms. That is 25.2%. It was 22.9% in the first quarter the line existed and 27.4% at the December 2025 peak. It runs with size: 8.6% of the modified balance at credit unions under $50 million, 21.3% at $1 to $10 billion, 28.5% above $10 billion.

| Asset band, March 2026 | Reporting a modified balance | Modified | Not in compliance | Share |
|---|---|---|---|---|
| Under $50M | 497 | $48M | $4M | 8.6% |
| $50 to 100M | 327 | $75M | $10M | 14.0% |
| $100 to 200M | 369 | $111M | $14M | 12.9% |
| $200 to 500M | 380 | $280M | $42M | 14.9% |
| $500M to 1B | 240 | $360M | $70M | 19.4% |
| $1 to 10B | 409 | $3,219M | $686M | 21.3% |
| Over $10B | 24 | $6,062M | $1,729M | 28.5% |

Accounts 1001F and DL0149, credit unions reporting a nonzero modified balance, March 2026 archive. Twenty-four credit unions above $10 billion hold 60% of the modified dollars and 68% of the non-compliant ones.

Put that next to Issue 13. On the securitized subprime shelves, 29% of loans extended while under 60 days late were back at 60+ within six months. Here, at any given quarter, 25% of the modified book is 30+ or nonaccrual. Different clocks, different thresholds, and the credit union line only counts borrowers already in difficulty, so the two are not one number. But they land in the same place. A quarter of the loans given a second set of terms are not keeping them.

**Inference**
The non-compliance share rising with size is probably two things. Big credit unions carry more indirect auto and unsecured paper, which is where modifications concentrate. And small credit unions know the member, so the modification they grant is more often the one that works. The filing cannot separate those. The number a small credit union should take from the table is that the system's 25% is not its number; its band runs at 9 to 15%.

## III · Where the line says something, and where it does not

Split the March 2025 cohort at the median of reported delinquency, 0.569% of loans. Inside each half, rank the reporters by modified share into quartiles again. Then look at next year's charge-offs.

Chart 2 · Modified share only matters in the half that is already delinquent

March 2025 cohort, n=2,942, split at the median delinquency ratio. Bars are net charge-offs in the year to March 2026, dollar-weighted within group.

Low-delinquency half, non-reporters through quartile 4: 0.323 / 0.354 / 0.460 / 0.416 / 0.445%. High-delinquency half: 0.601 / 0.866 / 0.750 / 0.894 / 1.508%. The same split on all nine annual pairs gives quartile 4 in the low half between 0.39% and 0.45% every time, and quartile 4 in the high half between 1.44% and 1.71%.

In the clean half, nothing. A credit union with below-median delinquency and a heavy modified line charges off about the same as one with a light line, in every one of the nine cohorts. The field does not find hidden losses in a clean book. That is the opposite of what the repossessed inventory line did in Issue 12, and it is worth saying plainly rather than burying, because the masking story from the securitization tapes does not carry over to this filing.

In the delinquent half, a lot. Quartile 4 charges off 1.51% against 0.75 to 0.89% for the other three quartiles and 0.60% for non-reporters. Twice the losses of a peer with the same delinquency profile and a lighter workout book. That holds in all nine pairs.

**Inference**
The reason the two lines behave differently is what they count. Repossessed inventory is a physical fact that arrives before the charge-off. The modified line is a decision the credit union already made about a borrower it already knows is in trouble. So in a clean book a small modified line is just good servicing. In a delinquent book a large one is the size of the problem the credit union has already admitted to, and it scales the loss. The line is a marker, not a lead.

## IV · Nine cohorts, one ordering at the top

| Annual pair | n | Reports none | Q1 | Q2 | Q3 | Q4 | Q4 / none |
|---|---|---|---|---|---|---|---|
| Mar 2023 to Mar 2024 | 3,090 | 0.375% | 0.689% | 0.603% | 0.665% | 1.274% | 3.4x |
| Jun 2023 to Jun 2024 | 3,087 | 0.408% | 0.535% | 0.732% | 0.692% | 1.231% | 3.0x |
| Sep 2023 to Sep 2024 | 3,078 | 0.421% | 0.537% | 0.714% | 0.689% | 1.260% | 3.0x |
| Dec 2023 to Dec 2024 | 3,060 | 0.433% | 0.547% | 0.658% | 0.661% | 1.342% | 3.1x |
| Mar 2024 to Mar 2025 | 3,033 | 0.453% | 0.525% | 0.748% | 0.709% | 1.417% | 3.1x |
| Jun 2024 to Jun 2025 | 3,011 | 0.410% | 0.499% | 0.650% | 0.709% | 1.331% | 3.2x |
| Sep 2024 to Sep 2025 | 2,998 | 0.393% | 0.515% | 0.574% | 0.715% | 1.277% | 3.2x |
| Dec 2024 to Dec 2025 | 2,972 | 0.408% | 0.505% | 0.591% | 0.700% | 1.258% | 3.1x |
| Mar 2025 to Mar 2026 | 2,942 | 0.416% | 0.615% | 0.604% | 0.692% | 1.325% | 3.2x |

Net charge-offs over the following year, dollar-weighted within group, every annual pair available since the definition change. Quartile 4 beats the non-reporters in all nine, by 3.0 to 3.4 times. Quartiles 1 through 3 sit between 0.50% and 0.75% with no consistent order among them.

The ordering is only clear at the top. Below the top quartile the line does not sort anything. A modified balance under about 0.4% of loans is noise, the same lesson as the small repo number in Issue 12: a screen built on this field needs a floor, not a flag on any nonzero value.

Head to head, it is the weakest of the three standard measures. Spearman correlation with next-year charge-offs, across the nine pairs: prior charge-offs +0.60 to +0.79, reported delinquency +0.38 to +0.55, modified share +0.19 to +0.23. Holding delinquency fixed, modified share keeps +0.13 to +0.17. Holding delinquency and prior charge-offs fixed, +0.05 to +0.12. It carries something of its own. Not much.

It is not a size effect. Apply the top-quartile threshold inside each asset band separately and the credit unions above it charge off more than the rest of their band in all 54 band-pair cells. The narrowest is the $200 to 500 million band in the March 2024 pair, 0.500% against 0.497%, which is a tie in practice.

## V · The redefault line, credit union by credit union

Account DL0149 lets you ask the Issue 13 question of each institution. Among reporters with the line filled in, 1,197 of 2,016 in the March 2026 cohort report zero non-compliance. Among the rest, the median non-compliant share is 22%. Split the reporters into those reporting zero, and the nonzero group into halves, and look at next year's charge-offs, for the five pairs the line has existed.

| Annual pair | Reports zero non-compliance | Nonzero, lower half | Nonzero, upper half | Median share, upper half |
|---|---|---|---|---|
| Mar 2024 to Mar 2025 | 0.657% | 0.563% | 0.971% | 21.9% |
| Jun 2024 to Jun 2025 | 0.602% | 0.550% | 0.913% | 20.2% |
| Sep 2024 to Sep 2025 | 0.540% | 0.573% | 0.879% | 22.5% |
| Dec 2024 to Dec 2025 | 0.531% | 0.567% | 0.912% | 26.6% |
| Mar 2025 to Mar 2026 | 0.620% | 0.544% | 0.965% | 22.6% |

Net charge-offs over the following year, dollar-weighted, credit unions with $10M+ loans reporting a nonzero modified balance and a value in DL0149. The nonzero group is split at its median non-compliant share.

A credit union whose modified loans are failing at above the median rate charges off 0.88 to 0.97% the following year. One reporting zero non-compliance charges off 0.53 to 0.66%. That is the per-institution version of the Exeter-against-Honda spread in Issue 13, smaller, because the credit union line only ever counts borrowers who were already in difficulty.

## VI · Half the lines are blank, and the dollars are in a few hundred hands

Of 4,250 federally insured credit unions filing March 2026, 2,246 report a nonzero modified balance. Among those with $5 million or more of loans, reporting runs from 37% under $50 million in assets to 100% above $10 billion. The small band is the least likely to fill it in and carries higher delinquency than any band below $10 billion, 0.98% against 0.71 to 0.83% in the middle bands. Same shape as the repo line. Whether a blank means no modifications or an unanswered question, the filing does not say, and every non-reporter group above is a blend of both.

The dollars sit in very few places. Of the $10.15 billion, $7.18 billion is at 202 credit unions whose modified line is 1% of loans or more. $5.35 billion is at 34 credit unions at 3% or more. The top quartile in the headline cohort, 495 institutions, holds $8.37 billion, 82% of the system total, on $451 billion of loans.

**Inference**
For an examiner or an acquirer this is a short list. Two hundred institutions hold seven in ten modified dollars, and for each of them the filing already carries the share that is late again. For a credit union CFO it is a comparison: the band's non-compliance rate in Section II is the number to put beside your own, and the 0.4% of loans threshold in Section IV is roughly where the line starts to mean something.

## VII · What this does not show

Five things, so nobody has to find them for me.

1

**The line marks losses. It does not forecast them.** The top quartile was already charging off 1.375% the year before it was ranked. Prior charge-offs outrank it on every test. Its use is inside the delinquent half of the population, and as a per-institution redefault read.

2

**A blank is read as zero.** About a third of credit unions with $10 million or more of loans report nothing. Some have nothing to report. Some did not answer. The non-reporter group is a mix and the filing cannot separate it.

3

**The series breaks at March 2023.** Before CECL the account held TDRs under a different rule. The 2016 to 2022 readings are a different measurement and are not compared to anything after the change.

4

**The nine cohorts overlap.** The same institutions appear in most pairs. Nine repetitions show the result is stable through time, not that it has been confirmed nine independent times.

5

**Whole-book charge-offs, not vehicle.** Modifications are filed for the whole book, so the outcome is the whole book's net charge-offs. Issue 12 tested a vehicle field against vehicle charge-offs. The two briefs are not comparable line for line.

One outside reference point, for context rather than support. The [Philadelphia Fed](https://www.philadelphiafed.org/-/media/FRBP/Assets/Consumer-Finance/Reports/cfi-report-april-2026-do-recent-auto-loan-delinquency-rates-overstate-borrower-distress.pdf) found in April that the stock of severe auto delinquency is rising while the inflow of newly delinquent borrowers is stable, and pointed at loss-mitigation practice as the likely reason. The bureau data it used cannot see a modification. This filing can, and the picture it gives is a workout book growing faster than delinquency, with a quarter of it already failing its new terms.

Falsifiable
This fails if, on the March 2026 to March 2027 pair, the top quartile of modifiers charges off less than twice the non-reporters, or if quartile 4 inside the high-delinquency half stops exceeding the other three quartiles. Both tests are mechanical, the accounts are named above, and the archives are public. **Anyone with the files can run it.**

## Proof: every figure, traced

All figures were rebuilt from the raw NCUA call report archives for this publication. Recomputed means the number was rebuilt from the quarterly files and matched. Derived means calculated from recomputed figures, arithmetic shown. Verified means read straight from the cited public document.

| Claim as stated | Source | Status |
|---|---|---|
| Account 1001F definition: modifications for borrowers experiencing financial difficulty, held for 12 months, in the four listed forms; DL0149: modified loans 30+ days past due or in nonaccrual under modified terms; TDR reporting before CECL adoption | NCUA Form 5300 instructions, effective September 30, 2025 , Schedule A Section 2 items 26 and 27; Form 5300, March 2025 | Verified |
| TDR concept removed for CECL adopters by ASU 2022-02, effective for fiscal years beginning after December 15, 2022 | Deloitte Heads Up on ASU 2022-02 | Verified |
| System modified balance $7.29B at 2022-12, $4.41B at 2023-03, $10.95B at 2025-12, $10.15B at 2026-03; 0.288% of loans at 2023-03, 0.587% at 2026-03; delinquency 0.525% to 0.845% | FS220H.txt field ACCT_1001F summed over CU_TYPE 1 and 2 in each quarterly archive from ncua.gov ; loans and delinquency from FS220A and FS220 totals in the same archives | Recomputed |
| 2.5x and 1.6x | 0.587 / 0.288 = 2.04 on the loan-share basis; 10.15 / 4.41 = 2.30 in dollars, 10.95 / 4.41 = 2.48 at the December peak; delinquency 0.845 / 0.525 = 1.61. "Two and a half times" refers to the December 2025 peak | Derived |
| Non-compliant $2.56B at 2026-03, 25.2%; 22.9% at 2024-03; 27.4% at 2025-12; by band 8.6 / 14.0 / 12.9 / 14.9 / 19.4 / 21.3 / 28.5%; 24 credit unions above $10B hold $6.06B modified and $1.73B non-compliant | FS220P.txt field ACCT_DL0149 against ACCT_1001F, same archives | Recomputed |
| 4,250 federally insured credit unions at 2026-03, 2,246 reporting a nonzero modified balance; reporting share by band 37% to 100%; small band delinquency 0.98% | FOICU.txt CU_TYPE 1 and 2; matches NCUA's published first-quarter 2026 count | Recomputed |
| Headline cohort n=2,942, groups 962 / 495 / 495 / 495 / 495; charge-offs 0.416 / 0.615 / 0.604 / 0.692 / 1.325%; prior-year 0.421 / 0.559 / 0.661 / 0.685 / 1.375%; delinquency 0.548 / 0.566 / 0.674 / 0.765 / 1.168%; median modified share 0.000 / 0.026 / 0.098 / 0.230 / 0.799%; quartile 4 threshold 0.441% | Charters with $10M+ loans at both 2025-03 and 2026-03; net charge-offs from ACCT_550 less ACCT_551, annualized by cycle month, over loans | Recomputed |
| 3.2x | 1.325 / 0.416 = 3.19 | Derived |
| Nine annual pairs, 2023-03 through 2025-03 starts: quartile 4 above non-reporters 9 of 9, ratio 3.0x to 3.4x; quartiles 1 to 3 between 0.50% and 0.75%; Spearman modified +0.19 to +0.23, delinquency +0.38 to +0.55, prior charge-offs +0.60 to +0.79; partials +0.13 to +0.17 and +0.05 to +0.12 | Same construction on every pair; replication table in the working files (annual_pairs.csv, band_check.csv) | Recomputed |
| Delinquency split, March 2025 pair: low half 0.323 / 0.354 / 0.460 / 0.416 / 0.445%, high half 0.601 / 0.866 / 0.750 / 0.894 / 1.508%, median delinquency 0.569%; across nine pairs low-half quartile 4 0.39 to 0.45%, high-half quartile 4 1.44 to 1.71% | Cohort split at median delinquency ratio; quartiles re-cut inside each half (dq_split.csv) | Recomputed |
| Top group above the rest of its band in 54 of 54 band-pair cells; the narrowest is $200-500M, 2024-03 pair, 0.500% against 0.497% | Cohort-wide quartile 4 threshold applied within each of six asset bands, nine pairs | Recomputed |
| Non-compliance terciles: zero group 0.53 to 0.66%, upper half 0.88 to 0.97%, median share in the upper half 20 to 27%; 1,197 of 2,016 reporters at zero | DL0149 / 1001F per charter, five pairs from 2024-03 (noncompliance_pairs.csv) | Recomputed |
| Concentration: 202 credit unions at 1%+ hold $7.18B; 34 at 3%+ hold $5.35B; top quartile 495 institutions hold $8.37B, 82%, on $451B of loans | 2026-03 archive, charters with $10M+ loans | Recomputed |
| Philadelphia Fed: stock of severe delinquency rising while inflow is stable; loss-mitigation practice as a candidate explanation; bureau tradeline data | Cheney, Hunt, Lambie-Hanson, Santucci and Zhou, April 2026 | Verified |
| Issue 13 figure: 29% of subprime extensions granted under 60 DPD were 60+ again within six months | Issue 13 , Section IV | Verified |

**Sources & notes**
**Data.** NCUA 5300 call report quarterly archives, cycles 2016-03 through 2026-03, downloaded from ncua.gov. Files used: FOICU.txt for charter type (federally insured only, CU_TYPE 1 and 2), FS220H.txt for Accounts 1000F and 1001F, FS220P.txt for Accounts DL0148 and DL0149, FS220 and FS220A for loans and delinquency, FS220I for charge-offs and recoveries, AcctDesc.txt for field definitions. The 2016 to 2022 readings are TDR balances under the pre-CECL definition and appear only in the sentence that says so.

**Method.** Annual pairs join each start quarter to the same quarter one year later on charter number. Cohort floor $10 million of loans at both ends. A blank modified balance is read as zero. Charge-offs are net of recoveries and annualized by cycle month. Group rates are dollar-weighted. Quartiles are set among reporters only; non-reporters are their own group. Correlations are Spearman; partials by rank regression residuals. The delinquency split uses the cohort median of total delinquent loans over total loans. Every figure was rebuilt from the raw archives immediately before publication, and the notebook that does it is kept with the working files.

**Companion issues.** [Issue 13](https://lendriskanalytics.com/insights/current-on-tape.html) reads the extension field on securitized auto loans and follows extended loans forward six months. [Issue 12](https://lendriskanalytics.com/insights/the-lot-behind-the-branch.html) reads the repossessed inventory line on the same filing as this one.

Where this brief goes beyond what the filings state, it is labeled as an inference. Point-in-time reading of public filings through September 15, 2026. LendRisk Analytics is an independent research publication with no position in, and no affiliation with, any institution mentioned. This is not investment, legal or accounting advice.

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Related

[Issue 13 Current, on tape.](https://lendriskanalytics.com/insights/current-on-tape.html)
[Issue 12 The lot behind the branch.](https://lendriskanalytics.com/insights/the-lot-behind-the-branch.html)