Accounting standards

Measures designed to give banks and credit unions more flexibility to help customers weather the coronavirus pandemic are set to expire Dec. 31 unless Congress renews them.

Two bills — one providing relief from a loan accounting standard and another extending forbearance measures — would collectively contain credit losses.

The agencies completed steps to ease a community bank capital measure temporarily and to delay a new credit-loss accounting standard.

The regulator approved a proposal that mirrors a rule banking regulators implemented in February 2019 to cushion the Current Expected Credit Losses standard's impact on capital levels.

The National Credit Union Administration will also discuss the current expected credit losses standard, which trade groups have argued that the industry should be exempt from.

Russell Golden, who just stepped down from the Financial Accounting Standards Board, says he wants to be remembered for encouraging open discourse over new rules and efforts to simplify financial accounting.

Borrower relief is necessary in a national emergency, but if the exclusion of the deferred loans from troubled-debt restructurings is extended past the end of the year, safety and soundness could be compromised.

In one of the first comprehensive analyses of how the banking industry was affected by the onset of the coronavirus pandemic, the agency said quarterly income fell by nearly 70% from a year earlier.

Lawmakers should go further than their recent criticism of the Financial Accounting Standards Board's loan-loss rule and just hand over its duties to the Securities and Exchange Commission.