Agencies announce optional CECL delay

Federal regulators announced an optional extension of the regulatory capital transition for the Current Expected Credit Loss accounting standard.

The interim final rule allows banking organizations that are required to adopt CECL this year to delay for two years the estimated impact of CECL on regulatory capital. This is in addition to the three-year transition period already in place.

Alternatively, banking organizations can follow the capital transition rule issued by the banking agencies in February 2019. The interim rule is effective immediately, and the agencies will accept comments for 45 days.