CUNA, Trades Press Agencies for CECL Relief

CUNA joined with four other financial services trade groups Wednesday to press the Financial Stability Oversight Council (FSOC) for a delay in CECL (current expected credit loss) implementation until a transparent quantitative impact study is performed and shared with the industry. The National Credit Union Administration (NCUA) is a member of the FSOC.

"While well intentioned, the [CECL] accounting standard issued by the Financial Accounting Standards Board (FASB) has the potential to disrupt lending to consumers and small businesses, increase the volatility of regulatory capital, and exacerbate procyclicality in our financial system," the groups said.

CUNA was joined by NAFCU, the American Bankers Association, Bank Policy Institute and Consumer Bankers Association in issuing the joint statement.

FASB met yesterday and discussed some CECL issues. The board announced it will hold a public roundtable in January to further discuss implementation issues with stakeholders, as well as publish a Q&A document to address use of the weighted average remaining maturity method for calculating loan loss reserves (see related story). The board also considered extending the comment deadline for a proposed technical update to the standard to Jan. 17.

The efforts of CUNA and the state league have resulted in some flexibility in the standard. FASB last month issued a final update to clarify the effective date for its CECL standard, making clear that credit unions would not need to begin reporting data on call reports until the beginning of 2022. The update also clarified that operating lease receivables are not covered within the scope of CECL.