Delay of Effective Date; Regulatory Capital Rule: Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rule and Conforming Amendments to Other Regulations

AGENCY:

Office of the Comptroller of the Currency, Treasury; the Board of Governors of the Federal Reserve System; and the Federal Deposit Insurance Corporation.

ACTION:

Final rule, delay of effective date.

SUMMARY:

On February 14, 2019, the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the agencies) published in the Federal Register a final rule to address changes to credit loss accounting under U.S. generally accepted accounting principles, including banking organizations' implementation of the current expected credit losses methodology (CECL) (final rule). The final rule had an effective date of April 1, 2019, and provides that banking organizations may early adopt the final rule prior to that date. The agencies have determined that adelay of the effective date to July 1, 2019, is appropriate.

DATES:

The effective date of the final rule published February 14, 2019 (84 FR 4222) is delayed until July 1, 2019. Banking organizations may early adopt this final rule prior to that date.

FOR FURTHER INFORMATION CONTACT:

OCC: Kevin Korzeniewski, Counsel, Office of the Chief Counsel, (202) 649-5490; or for persons who are hearing impaired, TTY, (202) 649-5597.

Board: Constance M. Horsley, Deputy Associate Director, (202) 452-5239; Juan C. Climent, Manager, (202) 872-7526; Andrew Willis, Senior Supervisory Financial Analyst, (202) 912-4323; or Noah Cuttler, Senior Financial Analyst, (202) 912-4678, Division of Supervision and Regulation; or Benjamin W. McDonough, Assistant General Counsel, (202) 452-2036; David W. Alexander, Counsel, (202) 452-2877; or Asad Kudiya, Counsel, (202) 475-6358, Legal Division, Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), (202) 263-4869.

FDIC: Benedetto Bosco, Chief, bbosco@fdic.gov; Richard Smith, Capital Markets Policy Analyst, rismith@fdic.gov; David Riley, Senior Policy Analyst, dariley@fdic.gov; Capital Markets Branch, Division of Risk Management Supervision, regulatorycapital@fdic.gov, (202) 898-6888; Michael Phillips, Counsel, mphillips@fdic.gov; or Catherine Wood, Acting Supervisory Counsel, cawood@fdic.gov; Supervision Branch, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

On February 14, 2019, the agencies published in the Federal Register a final rule to amend the capital rule to address changes to credit loss accounting under U.S. generally accepted accounting principles, including banking organizations' implementation of the current expected credit losses methodology (CECL). The final rule provides banking organizations the option to phase in over a three-year period the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard. In addition, the final rule revises the agencies' regulatory capital rule, stress testing rules, and regulatory disclosure requirements to reflect CECL, and makes conforming amendments to other regulations that reference credit loss allowances.

The final rule was published with an effective date of April 1, 2019, and provides that banking organizations may early adopt the final rule prior to that date. When the agencies submitted the final rule for publication in December 2018, this effective date satisfied all applicable statutory requirements. However, due to the partial government shutdown, the final rule was not published until February 14, 2019. Due to this delay in publication, the agencies have determined that a delay of the effective date of the final rule to July 1, 2019, is necessary to provide a sufficient review period under the Congressional Review Act and to satisfy the requirements of the Small Business Regulatory Enforcement Fairness Act of 1996, Riegle Community Development and Regulatory Improvement Act, and Administrative Procedure Act. Notwithstanding this delay in effective date, banking organizations subject to the final rule may comply with it as of January 1, 2019.