BPI Recommends Call Report Changes to Address Troubled Debt Restructuring

To Whom It May Concern:

The Bank Policy Institute[1] welcomes the opportunity to respond to the joint notice and request for comment by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, regarding revisions to the Consolidated Reports of Condition and Income (Call Reports) and Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002).[2]

BPI is supportive of the purpose of the proposed revisions to the Call Reports in replacing TDRs, which are no longer recognized following the adoption of Accounting Standards Update No. 2022-023 and the CECL methodology, with modifications to borrowers experiencing financial difficulty (MBEFD). BPI previously submitted comments to the Agencies regarding the importance of conforming Call Report reporting standards with U.S. GAAP, including not maintaining a cumulative reporting standard for MBEFDs. We appreciate that these comments appear to have been considered for the current proposal, which does not contain this unnecessary and burdensome reporting practice and further considers a potential 12-month reporting period in accordance with ASU 2022-02. It is critical that any regulatory reporting requirements for MBEFDs remain aligned with existing U.S. GAAP standards. Our comments herein are intended to reinforce this view and highlight the complexities that would arise if the reporting requirements are not aligned. Our comments also request increased clarity surrounding the proposed changes to the definition of ‘Past Due’ across the Call Reports and FFIEC 002.

To read the full comment letter, please click here, or click on the download button below.

[1] BPI is a nonpartisan public policy, research, and advocacy group, representing the nation’s leading banks and their customers. BPI’s members include universal banks, regional banks, and major foreign banks doing business in the United States. Collectively, they employ almost two million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

[2] 88 Fed. Reg. 66933.