Letter to FASB on the the Proposed Accounting Standards Update - Derivatives and Hedging (Topic 815)

Dear Mr. Day:

The American Bankers Association (ABA) welcomes the opportunity to comment on the Proposed Accounting Standards Update - Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Interest Rate Risk Hedging and Net Investment Hedging (the Exposure Draft). The Exposure draft would make targeted improvements to hedge accounting to: allow hedging interest rate risk for held-to-maturity (HTM) debt securities, broaden the Secured Overnight Financing Rate (SOFR) benchmark rate and expand the population of eligible net investment hedging instruments. ABA strongly supports each of the specific proposals, which will remove unnecessary constraints on hedging and that will better align financial reporting with institutions' risk management activities.

ABA appreciates that this Exposure Draft is part of the Board's broader plan to address hedge accounting issues identified through stakeholder feedback. In its February 2026 deliberations, the Board supported a three-stage approach: a short-term targeted improvements project, which is reflected in this Exposure Draft; a medium-term research project to explore expanding the portfolio layer method to liabilities; and a longer-term project to reconsider the hedge accounting model more broadly. Consistent with our response to FASB's 2025 agenda consultation, ABA supports this staged approach because it allows the Board to provide near-term relief on discrete, operable issues while preserving the opportunity to evaluate more fundamental improvements to the hedge accounting model over time.

Download the comment letter to read the full text.