The Office of the Comptroller of the Currency (OCC) on Friday issued the updated “Other Real Estate Owned” booklet of the Comptroller’s Handbook, which provides guidance to examiners on banks’ acquisition, reporting, management, and disposition of other real estate owned (OREO). The updated booklet includes accounting changes for foreclosed property under contract, in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Subtopic 360-20, Subtopic 610-20, and Topic 606.
Other updates were made to the booklet are as follows:
- details changes to the accounting for sales of OREO by public business entities. The changes became effective for fiscal years beginning after Dec. 15, 2017, including interim reporting periods within those fiscal years;
- details changes to the accounting for sales of OREO by non-public business entities. The changes become effective for fiscal years beginning after Dec. 15, 2018, and interim reporting periods within fiscal years beginning after Dec. 15, 2019;
- provides interim guidance on the OREO holding period for federal savings associations (FSAs) as a result of the integration of FSAs into 12 CFR 3;
- includes clarifications regarding supervisory guidance, sound risk management practices, and legal language;
- clarifies the roles of the bank’s board of directors and management;
- reflects the integration of FSAs into 12 CFR 7, subpart A, and 12 CFR 34, subpart C;
- references third-party risk management guidance issued since the booklet’s last publication.