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.
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.