Federal banking agencies are seeking comments about their proposed policy statement on the allowance for credit losses. KPMG explains the regulator’s expectations of banks subsequent to the adoption of the credit losses standard.
Financial institutions regulated by US federal banking agencies that report under US GAAP
October 17, 2019 – Proposed policy statement issued
December 16, 2019 – Comments due on proposed policy statement
The new CECL standard will substantially change the way banks account for credit losses. In response, federal banking regulators have proposed updates to their guidance that explain how banks should account for their allowance for credit losses.
The proposed interagency policy statement describes the CECL methodology and provides insights into what regulators would be looking for when they examine a bank’s accounting related to the CECL standard.
Why are the federal banking regulators proposing the changes?