Summary:
In response to changes in the accounting for credit losses under the Financial Accounting Standards Board's Accounting Standards Update (ASU) 2016-13, the banking agencies, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), are requesting comment on proposed revisions to the Consolidated Reports of Condition and Income (Call Report) and certain other FFIEC reports. Other changes addressed in the proposal, which relate to the reporting of high volatility commercial real estate (HVCRE) exposures and reciprocal deposits, result from the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). Institutions are encouraged to comment on the proposal by November 27, 2018.
Statement of Applicability to Institutions under $1 Billion in Total Assets: This Financial Institution Letter applies to all FDIC-supervised banks and savings associations, including community institutions.
Highlights:
-
The proposed changes related to credit loss reporting would affect all three versions of the Call Report
(FFIEC 031, FFIEC 041, and FFIEC 051), as well as the following FFIEC reports that are applicable to a
limited number of institutions:
- Foreign Branch Report of Condition (FFIEC 030),
- Abbreviated Foreign Branch Report of Condition (FFIEC 030S), and
- Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101).
- The proposal includes changes to the Call Report and the FFIEC 101 report that would implement the agencies' proposed revisions to the regulatory capital rules for the current expected credit losses (CECL) methodology in ASU 2016-13, including a CECL regulatory capital transition.
- Because ASU 2016-13 has different effective dates for different institutions, the proposed reporting changes related to credit losses would be phased in between March 31, 2019, and December 31, 2022.
- The reporting changes arising from EGRRCPA affected the reporting of HVCRE exposures and reciprocal deposits beginning as of the June 30, 2018, report date. In addition, effective as of the September 30, 2018, report date, Call Report Schedule RC-E, Deposit Liabilities, will include a new Memorandum item for "Total reciprocal deposits." Institutions also will report their "Total reciprocal deposits as of June 30, 2018" on a one-time only basis in Schedule RC-E in the September 30, 2018, Call Report.
- Redlined copies of the FFIEC report forms showing the proposed revisions related to credit losses, as well as the Call Report items for total reciprocal deposits, are available on the report forms webpage on the FFIEC's website.
- Institutions should review FIL-51-2018 for further information about the agencies' regulatory reporting proposal
Distribution:
- FDIC-Supervised Banks (Commercial and Savings) and FDIC-Supervised Savings Associations
Suggested Routing:
- Chief Financial Officer
- Chief Accounting Officer
- Call Report Preparer
Paper copies may be obtained via the FDIC's Public Information Center, 3501 Fairfax Drive, E 1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200).