Credit union associations continue to push for CECL flexibility, provide guidance
Thursday, May 2, 2019
For most, it seems far away, but for those in the credit union industry the daunting December 2021/January 2022 implementation dates for the current expected credit loss (CECL) standard makes it seem much closer.
Credit union associations on the national and state levels are actively working with regulators to provide flexibility and more guidance to ease this transition. Credit Union National Association (CUNA) leaders met with National Credit Union Administration (NCUA) board member Todd Harper April 24 to discuss several credit union priorities, including a strategy to ensure credit unions are prepared for CECL.
The National Association of Federally-Insured Credit Unions (NAFCU) continues to share industry concerns with the Financial Accounting Standards Board (FASB) and urge them to offer flexibility with compliance, or even exemption.
As a result of these efforts, credit unions should note these recent developments:
- FASB recently issued an update with amendments related to measurement and presentation of available for sale debt securities within the scope of CECL, and clarifies guidance related to when an entity should include recoveries when estimating the allowance for credit losses;
- The update also reflects FASB's recent decision to allow preparers to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis; and
- Financial regulators released a new CECL FAQ document to help institutions implement the standard.
To assist credit unions in CECL preparedness, CUNA is hosting a Current Expected Credit Loss School in Tempe, Arizona September 5-6. For those who can't attend in-person, CUNA will also offer a CECL eSchool in June. Federal regulators conducted an "Ask the Regulators" CECL webinar April 11, which is now available on demand.
Carolinas Credit Union League will also roll out materials and educational opportunities in the coming months. In the meantime, CCUL's Accounting Department stands ready to assist member credit unions and answer any questions. Email firstname.lastname@example.org for information.