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OCC Bulletin 2020-30
March 31, 2020
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Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties
On March 27, 2020, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) issued an interim final rule 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" (commonly referred to as CECL1) for a transition period of up to five years. Also on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act provides banking organizations with optional, temporary relief from complying with CECL. Today's joint statement clarifies the interaction between the CECL interim final rule and the CARES Act for purposes of regulatory capital requirements.
The joint statement applies to all OCC-supervised banks that are required to adopt CECL in 2020 under U.S. generally accepted accounting principles2. Most community banks are not required to adopt CECL until 2023.
Please contact the following individuals with Capital Policy at (202) 649-6370: Mark Ginsberg, Senior Risk Expert; Benjamin Pegg, Senior Risk Expert; Jung Sup Kim, Risk Specialist. Also contact John P. Shelly, Professional Accounting Fellow, Office of the Chief Accountant, at (202) 649-6550, or Kevin Korzeniewski, Counsel, Chief Counsel's Office, at (202) 649-5490.
Grovetta N. Gardineer
Senior Deputy Comptroller for Bank Supervision Policy
1 CECL stands for current expected credit losses.
2 The term "banks" refers collectively to national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.