Letter outlines proposed call report changes emanating from new credit losses accounting standard

Proposed revisions to call reports (and certain others) resulting from new accounting standards for credit losses are outlined in a new Financial Institution Letter (FIL), the Federal Deposit Insurance Corp. (FDIC) said Tuesday.

In issuing FIL-51-2018, the agency said that proposed changes to the Financial Accounting Standards Board’s (FASB) “current expected credit loss” (CECL) accounting standard (Accounting Standards Update (ASU) 2016-13). The new standard would affect all three versions of bank call reports, issued under the auspices of the Federal Financial Institutions Examination Council (FFIEC). Those reports are FFIEC 031, FFIEC 041, and FFIEC 051.

The accounting standard also applies, FDIC said, to FFIEC reports that are applicable to a limited number of institutions: 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 proposal includes changes to the Call Report and the FFIEC 101 report that would implement the agencies’ proposed revisions to the regulatory capital rules for the current expected credit losses (CECL) methodology in ASU 2016-13, including a CECL regulatory capital transition,” FDIC said. “Because ASU 2016-13 has different effective dates for different institutions, the proposed reporting changes related to credit losses would be phased in between March 31, 2019, and December 31, 2022.”

The FDIC letter also notes that the reporting changes arising from this year’s regulatory relief law – the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA, S. 2155) – affected the reporting of high volatility commercial real estate (HVCRE) exposures and reciprocal deposits beginning as of the June 30, 2018, report date. “In addition, effective as of the September 30, 2018, report date, Call Report Schedule RC-E, Deposit Liabilities, will include a new Memorandum item for ‘Total reciprocal deposits,’” the agency said. “Institutions also will report their ‘Total reciprocal deposits as of June 30, 2018’ on a one-time only basis in Schedule RC-E in the September 30, 2018, Call Report.”

FDIC said redlined copies of the FFIEC report forms showing the proposed revisions related to credit losses, as well as the Call Report items for total reciprocal deposits, are available on the report forms webpage on the FFIEC’s website.

The proposed call report changes were published in the Federal Register (and reported by Regulatory Report) Sept. 28. The proposed revisions, issued jointly by the Office of the Comptroller of the Currency (OCC), Federal Reserve Board, and FDIC, are out for comment until Nov. 27.

Proposed Agency Information Collection Activities; Comment Request – Federal Register notice

Proposed Revisions to the Consolidated Reports of Condition and Income and Other Regulatory Reports – FDIC release