Regulatory Alerts2020-12-07 | 2020-25830Amendments To Address the Temporary Deposit Insurance Assessment Effects of the Optional Regulatory Capital Transitions for Implementing the Current Expected Credit Losses Methodology
The Federal Deposit Insurance Corporation proposes amendments to the risk-based deposit insurance assessment system for large and highly complex insured depository institutions to address temporary assessment effects resulting from optional regulatory capital transition provisions for the Current Expected Credit Losses methodology. The proposal seeks to remove the double counting of specified portions of CECL transitional amounts in financial measures calculated using the sum of Tier 1 capital and reserves, as well as in the loss severity measure. These changes aim to ensure assessment rates accurately reflect bank risk without affecting the underlying regulatory capital relief provisions that allow banking organizations to phase in CECL impacts.