Federal Banking Agencies Make Technical Corrections to CECL Interim Final Rule

The FDIC, OCC, and FRB recently issued a technical correction, effective immediately, to its interim final rule, published in the Federal Register on March 31, 2020, regarding the phase-in of the current expected credit losses (CECL) methodology.  The corrections address errors and clarify provisions in the March 31 rule.

The original interim final rule provided transitional relief to banking organizations required to implement the CECL methodology for a fiscal year beginning in 2020.  Among other things, the original interim final rule addressed changes to the supplementary leverage ratio as applied to “advanced approaches” banking organizations.  However, under the “Changes to Applicability Thresholds for Regulatory Capital and Liquidity Requirements” final rule, which went into effect on December 31, 2019, the supplementary leverage ratio requirements apply to both advanced approaches banking organizations and Category III banking organizations.  To reflect this change and correct the unintentional omission of “Category III” in the original interim final rule, the corrected interim final rule expands the scope of its supplementary leverage ratio provisions to include Category III banking organizations.

The corrected interim final rule also includes other technical changes to correct errors in and make clarifications to the interim final rule.

WBK’s article on the original interim final rule can be found here.