Allowance for Loan and Lease Losses Methodologies and Documentation for Federally-Insured Credit Unions

Résumé

The National Credit Union Administration (NCUA) is proposing to adopt an Interpretive Ruling and Policy Statement on Allowance for Loan and Lease Losses (ALLL) Methodologies and Documentation for Federally-Insured Credit Unions (the proposed IRPS). The federal banking agencies recently issued a final policy statement intended to clarify the banking agencies' expectations regarding methodologies and documentation support for the ALLL. The Securities and Exchange Commission (SEC) issued parallel guidance in a Staff Bulletin. Likewise, it is necessary for the NCUA to issue analogous guidelines for federally-insured credit unions in order clarify the NCUA's expectations regarding methodologies and documentation support for the ALLL. This proposed IRPS is intended to provide the necessary parallel guidance for federally-insured credit unions. The proposed IRPS provides guidance on the design and implementation of ALLL methodologies and supporting documentation practices. The guidance recognizes that credit unions should adopt methodologies and documentation practices that are appropriate for their size and complexity.