Bulletin underscores rule delaying CECL for some banks made final

National banks were put on notice Thursday that an interim rule has been made final that delays the estimated impact on regulatory capital of the new current expected credit loss (CECL) accounting standard.

Office of the Comptroller of the Currency (OCC) Bulletin 2020-85 notes that the interim final rule issued in March by the federal banking agencies has now been made final. That interim final rule was intended to mitigate effects of the CECL accounting standard for up to two years for banks required under U.S. generally accepted accounting principles (GAAP) to implement the accounting standard before the end of this year.

The rule also allows a three-year transition period.

The interim final rule was made final Aug. 26.

The bulletin notes that the final rule adopts all provisions of the March interim rule, permits all banking organizations that adopt CECL in 2020 the option to use the new transition in the 2020 CECL interim rule, even if not required to adopt CECL under U.S. GAAP in 2020; and clarifies that a banking organization is not required to use the transition in quarters in which it would not generate a regulatory capital benefit.

OCC Bulletin 2020-85 – Current Expected Credit Losses: Final Rule