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Revised Interagency Policy Statement on the Allowance for Loan and Lease Losses ("ALLL")
(PYA Alert dated December 20, 2006)
Recently, the federal banking agencies, including the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, and the Office of Thrift Supervision, issued a Revised Interagency Policy Statement on the Allowance for Loan and Lease Losses (see the link below)
http://federalreserve.gov/boarddocs/srletters/2006/SR0617a1.pdf
The primary purpose of the Revised Policy Statement was to:
- ensure consistency with generally accepted accounting principles (GAAP); and
- ensure consistency with ALLL supervisory guidance issued post 1993
As a supplement to the Revised Policy Statement, the agencies also issued a set of 16 frequently asked questions and interpretive answers (FAQs). These FAQs provide considerable guidance on many of the issues that we have been educating our banking clients about over the past few years. Click here for a pdf document with the 16 FAQs included. Please take a look at the entire Revised Interagency Policy Statement when you have time, but we strongly encourage you to look over the 16 FAQs at your earliest convenience. All of the 16 FAQs are very relevant, but we believe that most institutions will find the guidance that FAQs 15 and 16 provide to be very beneficial.
Please contact Mike Shamblin at (800) 270-9629 to discuss the impact of the Revised Policy Statement on your institution.
The information provided via PYA Alert, Tax Planning Alert, or Audit and Accounting Alert should not be construed as accounting, auditing, consulting, or legal advice on any specific facts or circumstances. The contents are intended for general information purposes only. Please contact us at (800) 270-9629 to discuss your specific situation or to discuss any specific questions you may have.
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