By clearly communicating our expectations, by engaging the industry directly to understand the impact of these expectations and, when appropriate, providing banks with tools and resources to meet those expectations, we reduce uncertainty for banks. We continued to expand our communication approach this past July with the launch of the Federal Reserve’s Scaled CECL Allowance for Losses Estimator or SCALE tool.
SCALE gives community banks a tangible tool to help with their calculation of loan loss allowance under the Current Expected Credit Losses methodology. Our effort to identify simple and practical ways to implement CECL that would help reduce costs and complexity for smaller community banks was supported by the Financial Accounting Standards Board.