Call report changes for CECL, reform law proposed by banking agencies; comments due Nov. 27

Changes in bank call reports and others to address revised credit-loss accounting and changes required by this year’s financial regulatory relief measure are proposed by regulators in a joint notice published Friday in the Federal Register. The proposed revisions are out for public comment until Nov. 27.

The proposed revisions, issued jointly by the Office of the Comptroller of the Currency (OCC), Federal Reserve Board, and Federal Deposit Insurance Corp. (FDIC), generally address the revised accounting for credit losses under the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13) – the current-expected-credit-loss (CECL) standard. The changes also address revisions in regulatory capital related to implementing the agencies’ recent proposal on the implementation and capital transition for the CECL methodology.

Additionally, the changes address two sections of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), signed into law May 24, regarding high volatility commercial real estate (HVCRE) exposures and in the definition and treatment of “reciprocal” deposits in federal banking rules addressing brokered deposits.

The umbrella Federal Financial Institutions Examination Council (FFIEC) has approved issuing these changes for comment. The agencies’ proposal seeks comments on the extension and revision of the following reports:

  • Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign Offices (FFIEC 031);
  • Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only (FFIEC 041);
  • Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only and Total Assets Less Than $1 Billion (FFIEC 051);
  • Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002);
  • Report of Assets and Liabilities of a Non-U.S. Branch that is Managed or Controlled by a U.S. Branch or Agency of a Foreign (Non-U.S.) Bank (FFIEC 002S);
  • Foreign Branch Report of Condition (FFIEC 030);
  • Abbreviated Foreign Branch Report of Condition (FFIEC 030S); and
  • Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101).

The proposed revisions related to CECL (under FASB ASU 2016-13) would begin to take effect March 31, 2019, for reports with quarterly report dates and Dec. 31, 2019, for reports with an annual report date, with later effective dates for certain respondents. The changes in reporting of HVCRE exposures and reciprocal deposit were effective May 24 and already reflected in initial changes made for June 2018 call reports.

After reviewing comments, the agencies will decide whether additional changes are needed. The agencies are required to publish a second F.R. notice for a 30-day comment period and submit the final Call Reports, FFIEC 002, FFIEC 002S, FFIEC 030, FFIEC 030S, and FFIEC 101 to OMB for review and approval.

Proposed Agency Information Collection Activities; Comment Request

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