Expected Loss Estimator (ELE) ToolELE
On June 16, 2022, staff from the Federal Reserve hosted an Ask the Fed® webinar on the ELE tool, which can be used to determine expected credit losses under CECL. A recording of the webinar can be accessed by clicking here.
The ELE tool is an Excel-based tool that automates the Weighted-Average Remaining Maturity (WARM) method. The tool relies on a community financial institution’s loan-level data and assumptions. The ELE tool is transparent and provides fully viewable code and formulas to allow community financial institutions to independently understand and verify the ELE tool.
The ELE tool is intended for community financial institutions that have determined the WARM method is an appropriate method to use. Community financial institution management is responsible for ensuring that the method(s) used in the loss estimation process is appropriate for the financial institution’s size, complexity, and risk profile.