OCC – Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances; Correction

May 19, 2020 – The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation published an interim final rule in the Federal Register on March 31, 2020, that delays the estimated impact on regulatory capital stemming from the implementation of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses, Topic 326, Measurement of Credit Losses on Financial Instruments (CECL). This correcting amendment corrects errors in and clarifies the March 31, 2020, interim final rule.
Effective Date: May 19, 2020.
Applicability date: March 31, 2020.

Change/Rule Amendment: The agencies are clarifying that an electing banking organization would reflect the actual day-one changes to the CECL transitional amount, DTA transitional amount, and AACL transitional amount, including when calculating the modified CECL transitional amount and modified AACL transitional amount.

Reporting Impact: May report one day change as either increase or decrease for each individual transitional amount

For more information, visit www.federalregister.gov

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