US Agencies (FDIC, FED, and OCC) issued supplemental instructions to the Call Reports FFIEC 031, FFIEC 041, and FFIEC 051. The supplemental instructions have been issued in response to the comments received on the proposed interagency Policy Statement on allowances for credit losses. The supplemental instructions pertain to nonaccrual treatment of purchased credit-deteriorated (PCD) assets for the March 31, 2020 Call Report for banks that have PCD assets and have adopted the FASB Accounting Standards Update No. 2016-13 on the measurement of credit losses on financial instruments (Topic 326).
For purposes of the March 31, 2020 Call Report, if an institution has adopted ASU 2016‐13 and has a PCD asset, including a PCD asset that was previously a purchased credit‐impaired (PCI) asset or part of a pool of PCI assets, that would otherwise be required to be placed in non-accrual status, the institution may elect to continue accruing interest income and not report the PCD asset as being in non-accrual status if the following criteria are met:
- the institution reasonably estimates the timing and amounts of cash flows expected to be collected
- the institution did not acquire the asset primarily for the rewards of ownership of the underlying collateral, such as use of collateral in operations of the institution or improving the collateral for resale
The agencies plan to propose changes to the call report instructions to revise the nonaccrual treatment for PCD assets through the Paperwork Reduction Act process, which will include a request for comment. Call Reports are the source of the most current statistical data available for identifying areas of focus for on-site and off-site examinations. FFIEC 031 is the Call Report for a bank with domestic and foreign offices, FFIEC 041 is the Call Report for a bank with domestic offices only, and FFIEC 051 is the call report for a bank with domestic offices only and total assets less than USD 1 billion.
Keywords: Americas, US, Banking, Accounting, Credit Losses Standard, FFIEC 051, FFIEC 031, PCD Assets, Accounting Standards Update, CECL, US Agencies
A well-recognized researcher in the field; offers many years of experience in the real estate ﬁnance industry, and leads research efforts in expanding credit risk analytics to commercial real estate.
Leading economist; recognized authority and commentator on personal finance and credit, U.S. housing, economic trends and policy implications; innovator in econometric and credit modeling techniques.
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.