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Financial Institution Letter

Banker Webinar: New Transition Provision to Delay the Impact of CECL on Regulatory Capital for Institutions Required to Adopt CECL in 2020

April 10, 2020  |  FIL-41-2020

Summary:

The FDIC, the Board of Governors of the Federal Reserve, and the Office of the Comptroller of the Currency (the Agencies) will jointly host a webinar to discuss a new transition provision in an interagency Interim Final Rule (IFR) to delay the impact that the current expected credit losses methodology (CECL) for estimating allowances for credit losses has on regulatory capital. The webinar is scheduled for Tuesday, April 14, 2020, at 3:00 p.m. ET.

Statement of Applicability to Institutions with Total Assets Under $1 Billion: This Financial Institution Letter is applicable to all FDIC-supervised institutions that are required by U.S. generally accepted accounting principles (U.S. GAAP) to adopt CECL in 2020. Generally, institutions with total assets under $1 billion would not meet this criteria.

Highlights:

  • The Agencies recently adopted an IFR that delays the estimated impact on regulatory capital stemming from the implementation of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses, Topic 326, Measurement of Credit Losses on Financial Instruments.
  • The transition provision under the IFR is available to banking organizations that are required by U.S. GAAP to adopt CECL in 2020.
  • The Agencies will host a webinar to discuss the new transition provision under the IFR on Tuesday, April 14, 2020, at 3:00 p.m. ET.
  • Participants should preregister for the event at https://www.webcaster4.com/Webcast/Page/583/33977.
  • Participants are encouraged to submit questions in advance via email at asktheregulators@stls.frb.org. Webinar materials will be archived for future viewing.

Suggested Distribution:

FDIC-Supervised Institutions

Suggested Routing:

Chief Executive Officer
Chief Financial Officer
Chief Risk Officer

Related Topics:

Risk-Based Capital Rules, 12 CFR Part 324

Attachments:

Paper copies of FDIC FILs may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).