WASHINGTON, Dec 15 (Reuters) - In addition to unprecedented economic stimulus, the CARES Act passed by the U.S. Congress in March granted regulatory waivers to make it possible for lenders to help struggling borrowers by extending or deferring loan repayments without adverse consequences for their loan books. At the time, policymakers did not expect the economic fallout of the pandemic to last into 2021, and set the waivers to expire on Dec. 31. Here is the relief banks want extended: Troubled Debt Restructurings (TDRs) are the accounting and regulatory framework for loan modifications, such as deferring the loan, extending it, or reducing monthly repayments. Banks say TDR accounting is onerous, sometimes incurring additional capital charges, extra operational hassles and generally acting as a drag on banks’ overall asset quality. They say banks shouldn’t be penalized for trying to help customers who need temporary relief to keep them afloat until the pandemic passes. Currently, CARES suspends the process for TDR accounting through Dec. 31, and has been critical in encouraging banks to make loan modifications. Banks, fearing regulators and investors may fault them for high TDRs, want Congress to formally extend the relief through 2021. Without an extension, banks will slow or deny modifications and in some cases foreclose on the loan. In 2018, Congress introduced a simple community bank leverage ratio for smaller lenders to reduce their overall capital burden. The law allows regulators to set the required level, based on a leverage ratio, at between 8% and 10%, with regulators opting for 9%, despite community bank protests. To boost small banks’ ability to lend, the CARES Act brought this ratio down to 8% until Dec. 31. Community banks are lobbying for the 8% ratio to be extended indefinitely, saying doing so would free up resources that can help local communities, while maintaining safe system-wide capital levels. Current Expected Credit Losses or “CECL” is an incoming accounting standard that requires financial institutions to make expected credit loss allowances for the lifetime of a loan. Banks say the rule adds volatility to the amount of capital they must hold and creates incentives to reduce lending when borrowers need it most. According to the American Bankers Association, of the institutions required to implement CECL in January 2020, roughly 50 took advantage of a one-year delay granted by CARES Act. Banking groups are pushing to further delay CECL implementation to at least Jan. 1, 2023, saying doing so should make it easier to work with struggling borrowers. (Reporting by Michelle Price Editing by Sonya Hepinstall)