On March 19, 2020, the FDIC wrote to FASB with their recommendation to delay the implementation of CECL in light of the worldwide COVID-19 pandemic.
Highlights of the letter include:
- Urging the exclusion of COVID-19 related modifications from TDR classification
- Delaying the adoption of CECL for SEC registrants currently in transition
- Enacting a moratorium for those who are scheduled for 2023 adoption
The current economic turmoil is unquestionably an event never experienced before with the only comparable being that of the Great Recession, and possibly even the Great Depression.
Whether FASB agrees to delay or not, there will be an increased burden on banking personnel, systems, and capital.