# ASC 320-942-55: Investments—Debt Securities — Financial Services—Depository and Lending — 55 Implementation Guidance and Illustrations

Source: FASB Accounting Standards Codification, Basic View

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## ASC 320-942-55: 55 Implementation Guidance and Illustrations

[Read section](https://asc.understandingaccounting.org/asc/320/942/#55-implementation-guidance-and-illustrations)

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#### Financial Institutions' Ability to Hold Mortgage Securities to Maturity

##### [320-942-55-1](https://asc.understandingaccounting.org/asc/320/942/#320-942-55-1)

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Regulators of financial institutions can, under appropriate circumstances, conclude that the continued ownership of any asset represents an undue safety and soundness risk to an institution and, accordingly, require the divestiture of that asset. It was not intended that a regulator's overall divestiture authority be considered as an automatic impairment of an institution's ability to hold any security to maturity, since impairment would have precluded any use of the held-to-maturity category by regulated financial institutions. However, specific facts and circumstances could indicate that an institution does not have the ability to hold a security to maturity.

##### [320-942-55-2](https://asc.understandingaccounting.org/asc/320/942/#320-942-55-2)

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The federal regulatory agencies note that only in rare circumstances have examiners required a financial institution to dispose of mortgage securities that have become high-risk after acquisition. Such circumstances have occurred only when examiners have determined that there is a significant safety and soundness concern with respect to a particular institution that has arisen from its holdings of these assets. The agencies note that examiners' divestiture authority is not unique to high-risk mortgage securities but rather is the same authority they have with respect to any other security or asset. Thus, the mere existence of examiners' divestiture authority for high-risk mortgage securities should not preclude an institution from concluding it has the intent and ability to hold to maturity those securities that were non-high-risk when acquired.

##### [320-942-55-3](https://asc.understandingaccounting.org/asc/320/942/#320-942-55-3)

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See paragraphs

[948-310-25-1 through 25-2](https://asc.understandingaccounting.org/asc/310/948/#310-948-25-1)

, [948-310-30-4](https://asc.understandingaccounting.org/asc/310/948/#310-948-30-4), and

[948-310-35-4 through 35-5](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-4)

for additional guidance concerning mortgage loans held as long-term investments.