NCUA Chair Rick Metsger told CUNA that the agency has begun the process of consulting industry practitioners to assist in the transition as credit unions work to implement the new current expected credit loss (CECL) accounting standard. Metsger said the NCUA would welcome recommendations from CUNA as to whom within the credit union community the NCUA should reach out.
In June, CUNA President/CEO Jim Nussle contacted Metsger asking for the agency’s assurance that it will make assisting credit unions with implementation of the Financial Accounting Standards Board (FASB) new standard a priority.
At that time, Nussle also urged the agency to establish an implementation task force comprised of accounting experts from credit unions of all asset sizes nationwide, and CUNA offered to make recommendations for task force members.
CUNA also asked NCUA to develop a public framework of how it will assist credit unions as they begin to prepare for implementation of the standard. CUNA recommended that the framework include a timeline of when the agency will release detailed compliance resources.
The CUNA letter also reiterated concerns that the CECL rule will result in lower capital ratios at credit unions and banks. Nussle urged NCUA to instruct examiners to make the appropriate adjustments in assessments of capital adequacy in order to minimize the negative impact on credit unions.
Thanking Metsger for his response, Nussle said, “I appreciate that the NCUA listened to CUNA’s concerns regarding implementation of CECL and that, in general, the chairman responded directly to many of the issues we raised.
“Just as the hard work of CUNA and our member credit unions helped bring about a final version of the FASB standard that will make compliance much more manageable for credit unions than with the original proposal, we stand ready to continue to work with the NCUA to assure the best implementation support for credit unions.
“We urge the NCUA to provide the implementation guidance and compliance information as far in advance of the effective date of the standard as possible to allow credit unions ample time to comply.”
The NCUA chair’s letter to Nussle also stated: