Regulatory Alerts2020-06-01 | 2020-10291Interagency Policy Statement on Allowances for Credit Losses
The Office of the Comptroller of the Currency, Federal Reserve Board, FDIC, and NCUA issued a final interagency policy statement to maintain regulatory conformance with FASB ASC Topic 326 and U.S. GAAP for allowances for credit losses across all insured depository institutions and federally insured credit unions. The statement requires institutions to measure expected credit losses under the current expected credit losses methodology, properly account for available-for-sale debt security impairments, and maintain robust design, documentation, validation, and internal controls over their loss estimation processes. It clarifies board and management responsibilities, establishes examiner review standards that generally accept adequately supported estimates without adjustment, and supersedes prior ALLL policy statements once institutions adopt the new accounting standard.