In a 71 to 23 vote this afternoon, the Senate approved a spending package for the current fiscal year, funding the government through Sept. 30, 2020. The legislation, which was passed earlier this week by the House, now goes to the president’s desk for his signature.
Among the many provisions included in the package is one that 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. The American Bankers Association, 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.
“Bipartisan passage of this seven-year reauthorization, the longest ever in Ex-Im history, heralds a new era for the agency,” said Tod Burwell, president and CEO of BAFT, ABA’s global transaction banking subsidiary, who applauded the bill[s passage. “Our member banks work with Ex-Im to fill required financing gaps, and ensure the availability and affordability of trade finance for businesses of all sizes. We look forward to partnering with EXIM to deliver trade finance products that are crucial to international commerce and the growth of the U.S. economy.”