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ALLL/CECL and COVID-19 – Reserving for Loan Losses During a Pandemic

by John Hurlock, Executive Consultant at CEIS Review “Unlike the 2008 Financial Crisis, this crisis is borne of a microbe and not of a financial meltdown.” As recently as a few months ago, determining the reserve had settled into a fairly straightforward and predictable event. Losses have been extremely low for the last several years […]

Allowance for Credit Losses (ACL) Summary – Accompanies the Current Expected Credit Loss (CECL) directive issued by the FASB

On February 20, 2020, the four US Banking regulators (OCC, FRB, FDIC and NCUA) issued the final policy statement for the financial institution adoption of CECL, the FASB (ASU 2016-13) change from an incurred loss (IL) reserving methodology to an expected loss (EL) methodology. This methodology is a forward looking reserve determination and is calculated […]

Uncharted Waters – COVID-19 Is A Different Kind of Crisis

Overview of Initial Impact. How Should Lenders Prepare? Over the last few weeks, I’ve been researching the potential financial impact of the COVID-19 Pandemic and reflecting on the economic aftermath relative to previous crises. Although there are some commonalities in all crises (i.e. volatility, disruption), I believe that COVID-19 is profoundly different. The harsh reality […]
  • Posted by Justin Hill
  • On Wednesday May 13th, 2020
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Community Bank Partner – Commercial Portfolio Management

Over the past 8 weeks impacts of the actions taken to safeguard everyone from the virus and “flatten the curve” have forced many changes on both our personal and professional activities. As we begin the task to assess these changes and their potential impacts we need to also evaluate what tools are available to help […]
  • Posted by Justin Hill
  • On Wednesday April 29th, 2020
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Stress Testing in Stressful Times

Ten years ago, in the aftermath of the financial crisis the banking community and regulatory authorities embraced the use of enhanced modeling and stress-testing to ward against a future event having such an significant impact on the Nation’s banking environment. Those efforts aided by strong economic recovery, have resulted in increased capital levels and stronger […]

COVID-19 Reserve Analysis Assistance

CEIS Review understands that banks have heightened their consideration of “today’s” reserve level adequacy and plans for near to medium term provisions. Reserve levels are currently being impacted by a number of events, some of which are difficult to quantify and will only emerge over time. Decisions need to be made and there are several […]
  • Posted by Justin Hill
  • On Wednesday April 8th, 2020
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Regulatory Agencies respond to the COVID-19

In response to the COVID-19 the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration , and Office of Comptroller of the Currency issued a joint statement, on March 26th encouraging banks, savings associations and credit unions to offer responsible small-dollar loans to consumers […]

The US Department of Commerce

The US Department of Commerce has created a dedicated website to aid small business owners regarding the Federal Governments CARES Act and obtaining Grants or Loans. The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated almost $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the […]
  • Posted by Justin Hill
  • On Thursday April 2nd, 2020
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The Federal Reserve established the Money Market Mutual Fund Liquidity Facility

The Federal Reserve Bank regulatory announced, they are supporting the flow of credit to the economy, the final rule is to ensure that financial institutions well be able to enhance the liquidity and functioning of its crucial state and municipal money markets. The Federal Reverse Board launched Money Market Mutual Fund Liquidity Facility, or MMLF […]
  • Posted by Justin Hill
  • On Wednesday April 1st, 2020
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Regulatory agencies recognize the impact COVID-19

CEIS Review recognizes that the coronavirus pandemic is causing tremendous hardship across the world. It is everyone’s priority to care for those afflicted and to minimize the further spread of the virus. While great uncertainty remains, it has become clear that our economy will face severe disruptions. Challenges in the Financial Institutions Regulatory agencies recognize […]

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