The Iowa Division of Banking has issued new guidance, SG-2023-01, to all state-regulated banks concerning the application of Current Expected Credit Losses (CECL) accounting standards (ASC 326) and the calculation of Iowa Code Legal Lending Limits. This document clarifies the superintendent's expectations and provides direction on these complex regulatory and accounting matters.

Iowa-regulated banks must review and understand this guidance to ensure compliance with both CECL requirements and state-specific lending limits. While the guidance itself is non-binding, adherence is expected to maintain regulatory compliance and avoid potential supervisory concerns. Banks should assess their current practices against the guidance and make any necessary adjustments to their accounting and lending limit calculation methodologies.