Federal Reserve Board Releases SCALE CECL Tool

The Federal Reserve Board recently hosted an “Ask the Fed” webinar on the SCALE method and tool for determining expected credit losses under CECL.

The SCALE method is a simple, spreadsheet-based method developed by the Federal Reserve to assist smaller community banks in calculating CECL compliant allowances for credit losses (ACLs) using proxy expected lifetime loss rates. The SCALE tool is a template that smaller community banks can use if they wish to use the SCALE method. This tool, developed by the Federal Reserve, uses publicly available data from Schedule RI-C of the Call Report to derive the initial proxy expected lifetime loss rates.

The FRB CECL Resource Center and SCALE Tool can be found online.

Question of the Week

Q. What is a Social Security Representative Payee Account and how do I set one up?

A. The Social Security Administration (SSA) appoints a “representative payee” for a recipient of social security funds that is not qualified to handle the funds on their own. For example, a minor, the aged who are not mentally competent, or some institutionalized persons. More information about the rules that govern representative payees can be found on the Social Security Administration website, www.ssa.gov.

There are two different, but similar programs offered by the SSA. The first program is called the Social Security Representative Payee Program. The second program is called the Supplemental Security Income (SSI) Representative Payee Program. In either program, three common rules apply when creating an account. First, the beneficiary must own the account. Second, the beneficiary cannot have access to the account. Third, the beneficiary’s TIN must be used on the account.

To set up one of these accounts, the account should be titled: “Beneficiarys Name by Payee Name, Representative Payee.” A credit union could either provide for this type of account in its account agreement or use a trust account or agency account format. The signature card should be signed: “Payee Name, Representative Payee for Beneficiarys Name.” Since it is the beneficiary’s account, the beneficiary could qualify for membership or if the payee was qualified for membership, the payee could open the account for the beneficiary.

Related Link

SSA Rep Payee FAQs

Compliance Alerts

National Credit Union Administration

NCUA Board Approves Complex Credit Union Leverage Ratio Proposed Rule: The NCUA Board approved a proposed rule with would modify the NCUA’s capital adequacy regulation and provide a simplified measure of capital adequacy for federally insured credit unions that are classified as “complex.”

NCUA Issues Request for Information on Digital Assets and Related Technologies: The NCUA Board is gathering information and solicitation comments regarding the current and potential impact of activities connected to digital assets and related technologies. The RFI focuses on current and potential uses in the credit union system, and the risks associated with them.

Cybersecurity & Infrastructure Security Agency

Chinese State-Sponsored Cyber Operations: Observed TTPs: The CISA released an alert regarding Chinses state-sponsored cyber threats to federal, state, and local governments, as well as private industry.

Office of Foreign Assets Control

OFAC has updated the SDN list as of July 22. The last update prior to this was July 2.

Posted in Compliance, Compliance News, Compliance Question.