The Comptroller and I are having a disagreement about the accounting of a charged off loan. During this last year two of our lenders got together and made entries to a charged off loan; 1 to reinstate the principal and the other to pay it off, these offset one another and virtually made the loan disappear. He agrees that it should be against bank policy, but believes that it is not an accounting error that would get us written up by the examiners.

I don't quite understand?? Can you explain in a little more detail. Why did they do this? Of course, whatever the reason, it sure doesn't sound right. How much was the loan. Are they helping the customer evade income taxes, as a charged-off loan will eventually be reported as income to the borrower. Many, many questions??

Did the customer pay the charged off loan off? and the other, did the customer bring the loan current and was it put back on accruing?