House Passes 2020 Spending Bills; CECL Study Required

The House today approved a spending package for the current fiscal year, funding the government through Sept. 30, 2020. The Senate is expected to vote on the spending bills later this week. Among many provisions in the package, one—advanced by a 280-to-138 vote—directs the Treasury Department to conduct a study on potential adverse effects of the current expected credit loss model for loan loss accounting on regulatory capital.

ABA, along with members of Congress and expert observers, have long expressed concern that CECL could amplify the effects of an economic recession, and the association has called for CECL implementation to be paused while a quantitative impact study is conducted.

The spending package also includes several program extensions advocated by ABA. It authorizes the National Flood Insurance Program through Sept. 30, 2020, and provides long-term renewals for the U.S. Export-Import Bank (through 2026) and the Terrorism Risk Insurance Program (through 2027). The bill also establishes alternative procedures for Ex-Im to authorize financing in the event of a quorum lapse, ensuring that the agency’s board can remain fully functional.