Agencies Issue Interim Rule for Transitions of CECL ImpactCECL
On March 27, 2020, the federal bank regulatory agencies issued an interim final rule that allows banking organizations to mitigate the effects of the current expected credit loss, (CECL) accounting standard in their regulatory capital.
The CECL interim final rule provides banking organizations that adopt CECL during calendar year 2020 with the option to delay an estimate of CECL’s impact on regulatory capital by two years, followed by a three-year transitional period to phase out the aggregate amount of the capital benefit provided during the first two-year delay. The existing three-year transition option that the agencies adopted in 2019 would remain available. Banks have the option of selecting either the existing three-year option or the five-year option.
The interim final rule is intended to provide meaningful regulatory relief in light of recent events while also maintaining the quality of regulatory capital. The interim rule is effectively immediately. The agencies will accept comments on the CECL interim final rule for 45 days. To read the “Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances” and for information on how to submit comments, see the Federal Reserve’s Proposals for Comments site.
- Agencies Issue Interim Rule for Transitions of CECL Impact March 30, 2020
- FDIC Chairman Urges FASB to Delay Certain Accounting Rules Amid Pandemic March 19, 2020
- Senate Clears 2020 Spending Bills; Orders CECL Review December 19, 2019
- FASB Issues Narrow-Scope Improvements to Credit Losses Standard November 26, 2019
- FASB Announces Upcoming CECL Implementation Workshops October 23, 2019
- Agencies Seek Comment on Allowances for Credit Losses and Credit Risk Review Systems October 17, 2019
- FASB Unanimously Affirms Decision to Delay CECL Effective Dates October 16, 2019
- FASB Seeks Public Comment on Proposal to Delay Effective Dates for Private and Certain Public Companies and Organizations August 15, 2019
- FASB Staff Issues Q&A to Help Organizations Estimate Expected Credit Losses on Financial Assets July 17, 2019
- FASB Proposes Targeted Transition Relief to Institutions Applying the Credit Losses Standard February 18, 2019
- FASB Issues Staff Q&A on WARM CECL methodology for community banks January 10, 2019
- Ask the Regulators: Applying Model Risk Management to CECL Models at Large Banks September 3, 2019
- Ask the Regulators: Weighted-Average Remaining Maturity (WARM) Method April 2019
- Ask the Regulators: Practical Methods Smaller, Less Complex Community Banks Can Use as a Starting Point for CECL March 2018
- Banking: Current Expected Credit Loss (CECL) Congressional Research Service, October 2018
- Benefits and Challenges of the "CECL" Approach Federal Reserve Bank of Boston, March 2019
- CECL and the Credit Cycle Board of Governors of the Federal Reserve System, June 1, 2019
- The Impact of the Current Expected Credit Loss Standard (CECL) on the Timing and Comparability of Reserves Federal Reserve Board of Governors, March 2018
- Gauging CECL Cyclicality Moody’s Analytics, March 2018