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.

Continue Reading Agencies Propose CECL Policy Statement

On June 27, 2017, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (collectively, the “Agencies”) proposed revisions to their Call Report forms for insured depository institutions.  The proposed changes are intended to align Call Reports with a recent accounting change and industry reporting practices, and to reduce certain reporting burdens.  Notably, streamlining Call Reports was one of the U.S. Department of the Treasury’s recommendations for financial regulatory reform in its June 12, 2017 report.

Continue Reading Federal Banking Agencies Propose Changes to Call Reports

The Financial Accounting Standards Board (“FASB”) will hold an open meeting on June 12, 2017, to hear concerns from financial institutions regarding FASB’s recently finalized Accounting Standards Update for measuring credit losses on financial instruments (the Current Expected Credit Loss standard, or “CECL”) under Generally Accepted Accounting Principles (“GAAP”).

FASB issued the new CECL standard