Federal Reserve Bank of San Francisco
Publications

March 2016: Chip Cards, CECL, and More!

March 4, 2016

Author(s): Teresa Curran, Federal Reserve Bank of San Francisco

This issue of Supervisory Spotlight highlights a variety of topics, ensuring that there is something relevant to every reader! The first topic discusses the U.S. migration toward EMV integrated chip cards for debit, credit, and prepaid transactions. A Community Banking Connections article provides good background on this initiative and discusses opportunities to reduce operational risk and fraud losses in card portfolios. The second topic provides perspectives on the Financial Accounting Standards Board’s proposal to change how the industry accounts for loan and lease losses, the Current Expected Credit Loss, or CECL, model. While everyone will learn much more once the standard is finalized, it is not too early to begin thinking now about the impact of this change on individual institutions. The final two topics highlight guidance and articles that provide timely reminders about two areas of supervisory concern: the importance of maintaining quality loan growth and managing commercial real estate lending concentrations and compliance with the new and legacy flood insurance rules.

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