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B-332638 1 (2020-11-02)

handle is hein.gao/gaobaebzt0001 and id is 1 raw text is: c)AO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 B-332638 November 2, 2020 The Honorable Mike Crapo Chairman The Honorable Sherrod Brown Ranking Member Committee on Banking, Housing, and Urban Affairs United States Senate The Honorable Maxine Waters Chairwoman The Honorable Patrick McHenry Ranking Member Committee on Financial Services House of Representatives Subject: Department of the Treasury, Office of the Comptroller of the Currency, Federal Reserve System, Federal Deposit Insurance Corporation: Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of the Treasury, Office of the Comptroller of the Currency (OCC); Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) entitled Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances (RINs: 1557-AE82, 7100-AF82; 3064- AF42). We received the rule on October 19, 2020. It was published in the Federal Register as a final rule on September 30, 2020. 85 Fed. Reg. 61577. The effective date of the rule is September 30, 2020. According to the agencies, the final rule delays the estimated impact on regulatory capital stemming from the implementation of Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses, Topic 326, Measurement of Credit Losses on Financial Instruments (CECL). The agencies state the final rule provides banking organizations that implement CECL during the 2020 calendar year the option to delay for 2 years an estimate of CECL's effect on regulatory capital, relative to the incurred loss methodology's effect on regulatory capital, followed by a 3-year transition period. The agencies state they are providing this relief to allow these banking organizations to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019, while also maintaining the quality of regulatory capital. The Congressional Review Act (CRA) requires a 60-day delay in the effective date of a major rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later. 5 U.S.C. § 801(a)(3)(A). The 60-day delay in effective date can be waived, however, if the agency finds for good cause that delay is impracticable, unnecessary, or

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