Bipartisan Lawmakers Ask FSOC To Bring Consensus and Clarity To the Regulatory Treatment of the CECL Accounting Standard Across the Financial Sector

On May 11, a bipartisan group of lawmakers from the House Committee on Financial Services wrote Treasury Secretary Steven Mnuchin urging FSOC to work with the Securities and Exchange Commission and Financial Accounting Standards Board to provide a full and complete moratorium on  current expected credit losses (CECL) implementation for all regulated entities until January 1, 2022. The authors note this date would align with the prudential regulator’s interim final rule on regulatory capital, follow Congressional intent by providing significant relief from CECL, allow the necessary time for Treasury to understand the real-life impacts of CECL in a downturn, and harmonize implementation of this accounting standard across all financial entities.

Read the letter here.