Federal Agencies Issue Proposals Related to Credit Losses and Credit Risk Review Systems

The Federal Reserve Board, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency have issued two joint proposals: (1) “Interagency Policy Statement on Allowances for Credit Losses” and (2) “Interagency Guidance on Credit Risk Review Systems.”

The proposal on credit losses describes the “measurement of expected credit losses using the CECL methodology and updates concepts and practices detailed in existing supervisory guidance that remain applicable.”

The proposal on credit risk review systems discusses “sound management of credit risk, a system of independent, ongoing credit review, and appropriate communication regarding the performance of the institution’s loan portfolio to its management and board of directors.”

Comments on both proposals are due 60 days after the date of their publication in the Federal Register. For more information, see the press release on the Federal Reserve’s Web site.