This morning's Wall Street Journal is reporting that the Treasury is working on changes that will enable commercial real estate borrowers (e.g. General Growth Properties (GGP), CB Richard Ellis (CBG), Simon Property Group (SPG), etc.) to more easily restructure maturing debt so as to avoid foreclosure. And one of the most likely means will be through lower interest rates.

What may surprise readers is this: When banks lower the interest rate on existing loans, there's no immediate earnings hit (and this is in contrast to restructured securities, in which there's typically an immediate fair-market-value hit). This could affect any number of banks -- from JPMorgan (JPM) to Citigroup (C) to Bank of America (BAC) to Morgan Stanley (MS).

So if it isn't immediate, when is the impact felt?

In the future, when interest income is lower as these losses are effectively "amortized" over time.

I know the whole world is focused on the charge-off line in bank earnings, but, with each passing day, it feels like the regulators are moving more and more "losses" into interest income (such as the "caps" recently imposed on credit-card issuers). While this may make credit losses look better in the short run, I would offer that all of these actions are likely to seriously impair bank net interest margins for some time to come.

Worse, as someone who believes that net interest margin represents the lung capacity of the banking industry, lower interest income seriously limits banks' ability to withstand future earnings shocks.