CECL Consumer Impact and Study Bill of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3182 To require the Securities and Exchange Commission and certain Federal agencies to carry out a study relating to accounting standards, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 10, 2019 Mr. GONZALEZ of Texas (for himself, Mr. SHERMAN, Mr. DAVID SCOTT of Georgia, Mr. GOTTHEIMER, Mr. CUELLAR, Mr. LUETKEMEYER, Mr. WIL- LIAMS, Mr. HILL of Arkansas, Mr. LOUDERMILK, and Mr. BUDD) intro- duced the following bill; which was referred to the Committee on Finan- cial Services, and in addition to the Committee on Agriculture, for a pe- riod to be subsequently determined by the Speaker, in each case for con- sideration of such provisions as fall within the jurisdiction of the com- mittee concerned A BILL To require the Securities and Exchange Commission and certain Federal agencies to carry out a study relating to accounting standards, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘CECL Consumer Im- 4 pact and Study Bill of 2019’’. 5 VerDate Sep 11 2014 05:04 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3182.IH H3182 kjohnson on DSK79L0C42 with BILLS 2 •HR 3182 IH SEC. 2. DEFINITIONS. 1 In this Act— 2 (1) the term ‘‘appropriate committees of Con- 3 gress’’ means— 4 (A) the Committee on Banking, Housing, 5 and Urban Affairs of the Senate; and 6 (B) the Committee on Financial Services 7 of the House of Representatives; 8 (2) the term ‘‘CECL’’ means the accounting 9 standard in ‘‘Accounting Standards Update 2016– 10 13, Financial Instruments—Credit Losses (Topic 11 326)’’, issued by the Financial Accounting Stand- 12 ards Board in June 2016, as amended by ‘‘Account- 13 ing Standards Update 2018–19, Codification Im- 14 provements to Topic 326, Financial Instruments— 15 Credit Losses’’, issued by the Financial Accounting 16 Standards Board in November 2018; 17 (3) the term ‘‘Commission’’ means the Securi- 18 ties and Exchange Commission; 19 (4) the term ‘‘Federal financial regulators’’ 20 means— 21 (A) the Secretary of the Treasury; 22 (B) the Board of Governors of the Federal 23 Reserve System; 24 (C) the Bureau of Consumer Financial 25 Protection; 26 VerDate Sep 11 2014 05:04 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3182.IH H3182 kjohnson on DSK79L0C42 with BILLS 3 •HR 3182 IH (D) the Comptroller of the Currency; 1 (E) the Commodity Futures Trading Com- 2 mission; 3 (F) the Federal Deposit Insurance Cor- 4 poration; 5 (G) the Director of the Federal Housing 6 Finance Agency; and 7 (H) the National Credit Union Administra- 8 tion; and 9 (5) the term ‘‘small business concern’’ has the 10 meaning given the term in section 3(a) of the Small 11 Business Act (15 U.S.C. 632(a)). 12 SEC. 3. STUDY AND REPORT. 13 (a) IN GENERAL.—The Commission and the Federal 14 financial regulators, in consultation with the Financial Ac- 15 counting Standards Board, shall conduct a quantitative 16 study of— 17 (1) the potential impact that the implementa- 18 tion of CECL may have on the availability of credit, 19 with a particular focus on the impact on that avail- 20 ability— 21 (A) for consumers and small business con- 22 cerns; and 23 (B) with respect to the credit products on 24 which consumers and small business concerns 25 VerDate Sep 11 2014 05:04 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3182.IH H3182 kjohnson on DSK79L0C42 with BILLS 4 •HR 3182 IH rely during periods of economic expansion and 1 during recessions; 2 (2) whether implementing CECL could— 3 (A) accelerate the depletion of regulatory 4 capital that is available for lending purposes 5 during a recession; 6 (B) have a greater impact on regulatory 7 capital, or extend the period in which regulatory 8 capital is reduced, during a recession; or 9 (C) pose any other systemic risks to the 10 economy of the United States; 11 (3) the potentially disproportionate impact that 12 the implementation of CECL may have on financial 13 institutions, taking into account— 14 (A) the various sizes and levels of com- 15 plexity of those financial institutions; and 16 (B) the different amounts of resources that 17 are available to those financial institutions; 18 (4) the potential impact that the implementa- 19 tion of CECL may have on the decisions made by 20 investors; and 21 (5) the potential competitive impact that the 22 implementation of CECL may have on institutions 23 in the United States as a result of differing inter- 24 VerDate Sep 11 2014 05:04 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3182.IH H3182 kjohnson on DSK79L0C42 with BILLS 5 •HR 3182 IH national accounting standards used to measure cred- 1 it loss. 2 (b) REPORT.—Not later than 1 year after the date 3 of enactment of this Act, the Commission and the Federal 4 financial regulators shall submit to the Financial Account- 5 ing Standards Board and the appropriate committees of 6 Congress a report— 7 (1) regarding the results of the study conducted 8 under subsection (a); and 9 (2) that shall include— 10 (A) the identification of any negative im- 11 pacts resulting from the implementation of 12 CECL; and 13 (B) recommendations for changes to 14 CECL to eliminate or mitigate the negative im- 15 pacts described in subparagraph (A). 16 SEC. 4. COST-BENEFIT STUDY OF CECL IMPACT ON NON-FI- 17 NANCIAL INSTITUTIONS, INSURERS, AND 18 GOVERNMENT-SPONSORED ENTERPRISES. 19 (a) STUDY.—The Commission and the Federal finan- 20 cial regulators, in consultation with the Financial Ac- 21 counting Standards Board, shall carry out a study on the 22 potential costs and benefits of the impact of CECL on 23 non-financial institutions, the insurance industry (includ- 24 ing reinsurance), and Government-sponsored enterprises. 25 VerDate Sep 11 2014 05:04 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3182.IH H3182 kjohnson on DSK79L0C42 with BILLS 6 •HR 3182 IH (b) REPORT.—Not later than 1 year after the date 1 of enactment of this Act, the Commission and the Federal 2 financial regulators shall submit to the Financial Account- 3 ing Standards Board and the appropriate committees of 4 Congress a report containing all findings and determina- 5 tions made in carrying out the study required under sub- 6 section (a). 7 SEC. 5. DELAY IN IMPLEMENTATION OF CECL. 8 During the period beginning on the date of enactment 9 of this Act and ending on the date that is 1 year after 10 the date on which the Commission and the Federal finan- 11 cial regulators submit the report required under section 12 3(b), neither the Commission nor any of the Federal fi- 13 nancial regulators may require a person to comply with 14 CECL. 15 Æ VerDate Sep 11 2014 05:04 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H3182.IH H3182 kjohnson on DSK79L0C42 with BILLS