To All State Member Banks and Bank Holding Companies
in the Second Federal Reserve District:
The federal financial regulatory agencies have issued a new interagency policy statement on the Allowance for Loan and Lease Losses (ALLL) and supplemental Frequently Asked Questions (FAQs). The policy statement revises and replaces a 1993 policy statement on the ALLL.
The policy statement has been updated to ensure consistency with generally accepted accounting principles (GAAP) and post-1993 supervisory guidance. The 1993 policy statement was issued by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision. The revised policy statement updates this guidance and also extends it to credit unions and their examiners. The National Credit Union Administration has joined the other agencies in issuing the revised policy statement.
In addition to the revised policy statement, the agencies are issuing sixteen FAQs to assist institutions in complying with GAAP and the ALLL supervisory guidance.
See the Board’s press release and interagency policy statement below for full details.