Well, 2020 certainly threw us a curve ball and gave us much to consider in our personal lives as well as our banking lives. I don’t think anyone would consider 2020 a gift giving year….. or was it?
2020 actually was a significant year of gift giving from the regulators. In late 2019 we learned that the eligibility threshold for filing the reduced Form 051 was raised to $5 billion. Truly a gift for many institutions in 2020.
We also were given the gift of the Community Bank Leverage Ratio (CBLR) in 2020 with the added benefit of the drop in the minimum leverage ratio to 8% in order to reduce the effect COVID-19 may bring upon a bank’s capital ratios.
Even though these two areas are significant gifts from the regulators (in my opinion), I recently read that only two-fifths of the institutions that became eligible for the 051 Form when the threshold was raised to $5 billion took advantage of the reduce reporting offered by the 051 reporting form. In addition, approximately only 30% of banks with assets under $10 billion have elected the CBLR framework. These statistics are surely surprising to me and I am sure they leave the regulators wondering why so few banks took advantage of the reduced reporting offered by the 051 reporting form and the CBLR framework.
Well, it’s not too late to jump on the bandwagon and take advantage of the gifts offered by the regulators. You can still consider both of these options for 2021 reporting and give yourself a much needed break in 2021!
To learn more about the reduced reporting items in the 051 reporting form vs the 041 reporting form, check out our Call Report Resources site – there is a full listing of the line items that are not applicable in the 051 reporting form.
Also, if you were not sure about the CBLR calculations, we have a CBLR tool for your use as well.