CECL

Yesterday, on Sunday, March 22, 2020, U.S. Senate Republicans released the latest version of their COVID-19-related stimulus bill, the Coronavirus Aid, Relief, and Economic Security Act or CARES Act.  The bill contains several measures intended to provide relief to banks, their customers, and broader financial markets.

The latest version of the CARES Act includes the…

Today, March 19, 2020, FDIC Chairman Jelena McWilliams sent a letter to the Financial Accounting Standard Board (“FASB”), the body that is responsible for establishing U.S. generally accepted accounting practices (“U.S. GAAP”).  The Chairman’s letter requests that FASB take three specific actions to ease the impact of certain U.S. GAAP standards in light of the economic conditions created by the COVID-19 pandemic.  Specifically, the letter requests that FASB (i) announce that loan modifications offered to borrowers affected by COVID-19 will not be classified as troubled debt restructuring (“TDR”), (ii) provide that banks that are already subject to the current expected credit loss methodology (“CECL”) may postpone CECL implementation, and (ii) delay the ongoing phase-in of CECL.

The three requests are described in more detail below.…

Continue Reading FDIC Chairman Asks FASB to Respond to COVID-19 Crisis, Including by Delaying CECL

On October 17, 2019, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and National Credit Union Administration released for public comment a proposed interagency policy statement on allowances for credit losses (“ACLs”).  The proposed policy statement reflects the Financial Accounting Standards Board’s adoption of the current expected credit losses (“CECL”) methodology.
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Continue Reading Agencies Propose CECL Policy Statement