July 01, 2021
Federal Reserve announces it will soon release new tool to help community banks implement Current Expected Credit Losses (CECL) accounting standard
For release at 11:00 a.m. EDT
The Federal Reserve announced on Thursday it will soon release a new tool to help community banks implement the Current Expected Credit Losses (CECL) accounting standard. Known as the Scaled CECL Allowance for Losses Estimator or "SCALE," the spreadsheet-based tool draws on publicly available regulatory and industry data to aid community banks with assets of less than $1 billion in calculating their CECL allowances.
"The SCALE tool responds directly to one of the consistent concerns I've heard from across community banks—navigating the complexity of complying with CECL. I'm confident smaller banks will find this tool greatly simplifies that work and provides a practical solution to this important compliance challenge," said Governor Michelle W. Bowman.
The Federal Reserve will launch the SCALE tool and answer questions during an "Ask the Fed" webinar on July 15, 2021. The session is intended for community banks and will feature participation from the Financial Accounting Standards Board and the Conference of State Bank Supervisors. Registration information is available at AsktheFed.org. The SCALE tool will be available via SupervisionOutreach.org/cecl.
Introduced by FASB in 2016, the CECL methodology was effective for most public financial institutions beginning in 2020 and most community banks with assets under $1 billion will implement CECL in 2023.
For media inquiries, call 202-452-2955
Last Update: July 01, 2021