The Office of the Comptroller of the Currency, the FDIC and the Board of Governors of the Federal Reserve System (collectively, the "agencies") requested comments on a series of amendments to the bank capital rules to incorporate revised financial accounting standards for credit losses. Comments are due by July 13, 2018.
The proposed rulemaking would facilitate the adjustment process for banking organizations adopting the new Financial Accounting Standards Board standards (see previous coverage). The proposal would, among other things:
- allow banking organizations to add allowance for credit losses ("ACL") when they adopt the credit losses methodology ("CECL");
- give banking organizations an optional three-year transition arrangement to phase in the regulatory capital effects after implementing CECL;
- incorporate regulatory disclosure requirements and stress-testing regulation changes; and
- extend the ACL amendments to other agency regulations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.