WASHINGTON–FDIC Chairman Jelena McWilliams has sent a letter to the Financial Accounting Standards Board (FASB) urging a delay in transitions to and exclusions from certain accounting rules.
The FDIC has also announced a number of other changes in response to the coronavirus in terms of its operations.
Both credit union trade groups have also urged FASB to delay CECL as a result of the tumult caused by the coronavirus.
In its letter to FASB, the FDIC called for:
- Excluding COVID-19-related modifications from being considered a concession when determining a troubled debt restructuring (TDR) classification
- Permitting financial institutions currently subject to the current expected credit losses (CECL) methodology an option to postpone implementation of CECL given the current economic environment
- Imposing a moratorium on the effective date for those institutions that are not currently required to implement CECL to allow these financial institutions to focus on immediate business challenges relating to the impacts of the current pandemic and its effect on the financial system.
“Today we are confronting new and uncertain challenges in view of the worldwide pandemic,” McWilliams wrote. “The nation’s banking industry is responding to rapidly evolving business conditions that are unprecedented in our history. To support the industry’s efforts to focus on their employees and customers, I encourage FASB to take these much needed actions to allow banks to help their communities at this time of need.”
The full letter can be found here.
Other Changes Announced
In addition, the FDIC also announced a number of changes in response to the coronavirus. All the steps are aimed at ensuring the health and safety of its employees, as well as continuity of operations, the agency said.
Among the FDIC announcements:
- Consistent with recent guidance from the Office of Management and Budget, and out of concern for the health of staff that would have been required to participate live, the FDIC said it has decided to proceed with today’s previously announced open board of directors meeting on a notational basis. Vote results and any board member statements will be released to the public following the votes.
- All FDIC employees in all FDIC facilities are now engaged in mandatory telework through at least March 30.
- Supervisory and other FDIC activities at financial institutions will be conducted off-site for two weeks starting March 16. Any on-site activities that are necessary will be conducted with minimal on-site teams. As CUToday.info reported here, http://www.cutoday.info/site/Fresh-Today/NCUA-Makes-Changes-in-How-Exams-Are-Conducted NCUA has announced similar changes.
- The voluntary early retirement and separation programs announced earlier this month have been suspended at this time.
- Externally, the FDIC noted it has released statements for financial institutions encouraging banks to work with impacted borrowers and to utilize liquidity measures available to them through the Federal Reserve.