FDIC proposes temporary rule to temper CECL transition effect

FDIC FIL-107-2020, issued November 20, 2020, announces an FDIC proposed rulemaking that would address the temporary deposit insurance assessment effects resulting from certain optional regulatory capital transition provisions relating to the implementation of the current expected credit losses (CECL) methodology. The proposal would remove the double counting of a specified portion of the CECL transitional amount or the modified CECL transitional amount, as applicable, in the calculation of certain financial measures that are used to determine assessment rates for large and highly complex insured depository institutions (IDIs).

The proposal would affect only those institutions with $10 billion or more in total assets. In order to implement these adjustments, the proposal would require large and highly complex IDIs that elect a CECL transition provision to report one additional, temporary item on the Consolidated Reports of Condition and Income (Call Report).

Comments on the proposed rule will be accepted for 30 days after publication in the Federal Register.

PUBLICATION AND COMMENT PERIOD UPDATE: Published at 85 FR 78794 in the December   7, 2020, Federal Register, with a 30-day comment period that ends on January 6, 2021.