The Federal Reserve today said it plans to launch a new tool, the Scaled CECL Allowance for Losses Estimator, or SCALE, to help community banks implement the current expected credit loss standard. The Fed will launch the spreadsheet-based tool on July 15 during an “Ask the Fed” webinar featuring speakers from the Financial Accounting Standards Board and the Conference of State Bank Supervisors. Bankers can register for the webinar at AsktheFed.org.
The tool uses industry or peer data from the Call Report as the starting point for estimating an allowance for credit losses. Banks must further adjust this starting point to reflect bank-specific facts and circumstances to arrive at a final CECL estimate. The intent of this approach is to simplify CECL calculation for community banks,