Representatives from 15 American Bankers Association member banks of all sizes met with the Federal Reserve, OCC, and FDIC yesterday to discuss concerns related to the impact of the Financial Accounting Standards Board’s Current Expected Credit Loss accounting standard. Attendees discussed the challenges that the new standard will present with regard to operations, capital and regulatory supervision. The regulators acknowledged the need for continued engagement regarding CECL effects, particularly with respect to regulatory capital. ABA staff also attended the meeting, along with representatives from the Clearing House and the Financial Services Roundtable.
The CECL standard, which goes into effect in 2020 for SEC registrants and 2021 for other banks, requires an estimate of expected credit losses over the life of the portfolio to be effectively recorded upon origination. For more information, contact ABA’s Mike Gullette or Barry Mills.