Regulators clarify optional CECL delay

Regulators issued a joint statement clarifying the interaction between the interim final rule that provides a five-year Current Expected Credit Loss transition period and the temporary CECL relief provided by the Coronavirus Aid, Relief, and Economic Security Act.

The agencies last week announced an optional extension of the regulatory capital transition for the CECL 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, in addition to the three-year transition period already in place.