CARES Act changes will be applied to March 31 call reports, agencies state in letter

Changes resulting from legislation passed in late March providing banks with regulatory relief in response to the coronavirus crisis will be applied to call reports for March 31, the federal banking agencies said in a letter late Thursday.

In addition, call report instruction books are being updated to reflect the community bank leverage ratio (CBLR) and the capital simplification rules, both of which took effect Jan. 1, the letter from the Federal Deposit Insurance Corp. (FDIC), the Federal Reserve, and Office of the Comptroller of the Currency (OCC) stated. The letter was sent jointly under the auspices of the Federal Financial Institutions Examination Council (FFIEC).

The changes reflected in the report are from those made by the Coronavirus Aid, Relief and Economic Security Act (CARES Act), enacted March 27. The changes: revised the definition of eligible retained income in the capital rule; gave permission for banks to neutralize the effects of purchasing assets through the Federal Reserve’s Money Market Mutual Fund Liquidity Facility (MMMLF) on their risk-based and leverage capital ratios; provided an optional delay of the current expected credit loss (CECL) accounting standards effects on regulatory capital; and offered an optional early implementation of the standardized approach for calculating the exposure amount of derivatives, or SA-CCR.

The letter to bank chief executives also reminded banks and thrifts that the banking agencies would not take action against institutions that submit their March 31 call reports after the filing deadline. That is, if the report is ultimately submitted within 30 days of the original filing date.

FDIC FIL-39-2020: Consolidated Reports of Condition and Income for First Quarter 2020

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