New Federal Budget Includes Possible CECL Capital Impact Study
The Consolidated Appropriations Act for Fiscal Year 2020 was passed by both the House and Senate and signed into law by President Trump on December 20, 2019. The massive 2,371-page package includes 12 appropriation bills split into two parts—one focused on national security priorities and the other on domestic agencies. The package authorizes $1.4 trillion to fund the operation of certain federal government agencies through September 30, 2020.
The U.S. Senate Appropriations Committee issued report language in the legislation that includes a section directing federal financial regulators to conduct a study on the need, if any, for changes to regulatory capital requirements necessitated by the CECL standard to be submitted within 270 days.
In general, House and Senate committees use report language for two broad purposes. First, report language explains a measure’s provisions to the chamber(s) that will subsequently consider it. Second, report language also may communicate legislative intent to the agencies that will carry out the measure once it becomes law. Although report language itself is not law and, therefore, not binding in the same manner as language in the statute, agencies usually seek to comply with any directives contained therein.
Do not postpone CECL implementation plans just yet; performance of such a study currently has no effect on any CECL effective dates or provisions.
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