Bankowość · 30/09/2020

Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation are adopting a final rule that delays the impact on regulatory capital from the implementation of Accounting Standards Update No. 2016-13, Financial Instruments--Credit Losses, Topic 326, Measurement of Credit Losses on Financial Instruments (CECL). This rule provides banking organizations that implement CECL in 2020 the option to delay an estimate of CECL's effect on regulatory capital for two years, followed by a three-year transition period, to allow them to focus on lending to creditworthy households and businesses amid recent economic strains caused by the coronavirus disease 2019.