The NCUA and other federal financial regulators released a joint statement Friday regarding the finalized current expected credit loss (CECL) standard. The statement was also issued by the Federal Reserve board of governors, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency.
CUNA is pursuing guidance on the standard, as well as other implementation resources with the NCUA, and will closely analyze the standard with its Accounting Advisory Committee.
The new standard uses an “expected loss” measurement for the recognition of credit losses, which replaces the various existing impairment models in U.S. generally accepted accounting principles that generally use an “incurred loss” approach.
CUNA continues to disagree with the Financial Accounting Standards Board’s (FASB) decision to apply the new standard to credit unions, but a several CUNA-recommended improvements are present in the final standard.
The joint statement includes a summary of key elements of the new standard, as well as initial supervisory views from the agencies on the standard.
The initial supervisory views cover: