Federal banking agencies issue proposed policy statement on the allowance for credit losses
Defining Issues | October 2019
Federal banking agencies have proposed a policy statement on CECL, explaining what they would be looking for.
Federal banking agencies are seeking comments about their proposed policy statement on the allowance for credit losses. KPMG explains the regulator’s expectations of banks subsequent to the adoption of the credit losses standard.
Applicability
- Financial institutions regulated by US federal banking agencies that report under US GAAP
Relevant dates
- Allowance for Loan and Lease Losses (ALLL) Policy Statement
- October 17, 2019 – Proposed policy statement issued
- December 16, 2019 – Comments due on proposed policy statement
Key Impacts:
- The new CECL standard will substantially change the way banks account for credit losses. In response, federal banking regulators have proposed updates to their guidance that explain how banks should account for their allowance for credit losses.
- The proposed interagency policy statement describes the CECL methodology and provides insights into what regulators would be looking for when they examine a bank’s accounting related to the CECL standard.
Report contents
- Applicability
- Why are the federal banking regulators proposing the changes?
- Proposed changes
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Federal banking agencies issue proposed policy statement
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