FDIC Updates Call Reports Implementing CECL Related Changes
FDIC announced, via its Financial Institution Letter (FIL), that the US banking agencies, under the auspices of FFIEC, have finalized revisions to certain reports, including FFIEC 031, FFIEC 041, FFIEC 051, and FFIEC 101 reports, that primarily address changes in the accounting for credit losses under the Accounting Standards Update (ASU) 2016-13 of FASB. Other revisions to these reports result from the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCP Act) and relate to the reporting of high-volatility commercial real estate (HVCRE) exposures and reciprocal deposits. The revisions were issued for comment in September 2018 and are subject to approval by the U.S. Office of Management and Budget.
This FDIC Financial Institution Letter applies to all FDIC-supervised banks and savings associations, including community institutions. The changes related to credit loss reporting affect all three versions of the Call Reports (FFIEC 031, FFIEC 041, and FFIEC 051) as well as the following FFIEC reports that are applicable to a limited number of institutions:
- Foreign Branch Report of Condition (FFIEC 030)
- Abbreviated Foreign Branch Report of Condition (FFIEC 030S)
- Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101)
The changes to the Call Reports and the FFIEC 101 report implement the agencies' recent revisions to the regulatory capital rules for the current expected credit losses (CECL) methodology in ASU 2016-13, including a CECL regulatory capital transition. Since ASU 2016-13 has different effective dates for different institutions, the reporting changes related to credit losses will be phased in between March 31, 2019 and December 31, 2022. The reporting changes involving the reporting of HVCRE exposures and reciprocal deposits arise from two sections of EGRRCP Act that were effective on its enactment on May 24, 2018. Consequently, these changes affected reporting in the Call Reports and the FFIEC 101 report beginning as of the June 30, 2018 report date.
Additionally, the US Agencies (OCC, FED, and FDIC) are currently considering the comments received on a separate proposal to implement Section 205 of EGRRCPA on reduced reporting for covered institutions in the Call Report (dated November 19, 2018). Although the proposal included revisions to the FFIEC 051 reporting requirements that were proposed to take effect on March 31, 2019, these reporting changes, if finalized, would take effect no earlier than June 30, 2019.
Related Links
- FDIC FIL-12-2019
- FDIC FIL-10-2019
- CECL Revisions to Regulation Capital Rule (PDF)
- FFIEC Reporting Forms
Keywords: Americas, US, Banking, IFRS 9, CECL, Reporting, HVCRE, Commercial Real Estate, FFIEC 031, FFIEC 041, FFIEC 051, FFIEC 101, EGRRCP Act, FDIC
Featured Experts
Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Related Articles
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.
