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Contact:
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Robert Schmermund
(202) 857-3104
Jim Eberle
(202) 857-3145
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Jim Eberle
(202) 857-3145 (work)
(703) 893-2593 (home)
[email protected]
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For Immediate Release
November 7, 2000
#00-126 |
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E-mail:
[email protected] |
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ACB OPPOSES BANK REGULATORS’ LOAN-LOSS METHODOLOGY
America’s Community Bankers has praised the federal banking regulators,
acting through the Federal Financial Institutions Examination Council, for
reaffirming that generally accepted accounting principles require any
methodology that determines allowances for loan and lease losses to use
historical experience and management’s current judgments about the credit
quality of the loan portfolio.
ACB, however, has strongly objected to the “costly administrative burden
that implementation of the proposed methodology and validation requirements
would impose on community banks,” in its comment letter to the FFIEC.
Noting that the Securities and Exchange Commission and the accounting
profession are involved in a “misguided effort” to eliminate the use
of judgment and experience in computing the loan loss reserve, ACB said it
disagreed with the FFIEC proposal that would “impose a disproportionally
heavy burden of proof on community banks to corroborate their use of judgment
and experience. Community banks feel that they have been unfairly caught in the
middle.”
“ACB strongly requests that both groups restart their current effort to
work cooperatively so that it begins from the premise that no acceptable
interpretation of GAAP can jeopardize safety and soundness or sacrifice fairness
in the interest of precision,” ACB said.
ACB’s Comment Letter is LINKED.
America’s Community Bankers is the national trade association committed to shaping the future of
banking by being the innovative industry leader strengthening the competitive position of
community banks. To learn more about ACB, visit
www.AmericasCommunityBankers.com.
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