See the attached excerpt from the November 9, 2015, Supervision News Flash, from the Federal Reserve Bank of Richmond. It provides some good advice about what you should be doing now to prepare for the new accounting standard (code name CECL) and approach to estimating loan losses. CECL is currently expected to be issued in Q1’16. Although the implementation date is still uncertain, speculation is that implementation would be required in 2019/2020 timeframe. Although that sounds like a long time away, as you begin to understand the requirements and formulate a methodology, you will realize that you will likely need several years of data you may not collect and retain currently.
| CECL Preparation Advice |
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