NORWALK, Conn. (3/24/16)--Two Credit Union National Association (CUNA) members have been named to the transition resource group for the upcoming current expected credit loss (CECL) proposal, the Financial Accounting Standards Board (FASB) announced Tuesday. According to FASB, the CECL proposal is likely to be finalized by mid-2016.
Susan Hannigan, senior vice president/chief financial officer at Jeanne D’Arc CU, Lowell, Mass., and Doug Wright, chief financial officer at Mission FCU, San Diego, have been named to the group.
“This is a great opportunity to ensure the credit union perspective is present during the resource group’s discussions,” said Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer.
The CECL proposal would utilize a single “expected loss” measurement for the recognition of credit losses, which would replace the multiple existing impairment models in U.S. generally accepted accounting principles that generally use an “incurred loss” approach.
According to FASB, the resource group will solicit, analyze and discuss implementation issues that could arise when organizations implement the upcoming CECL standard. The group will then share their views with FASB, which will help the board determine what, if any, action is appropriate to address those issues.
Hannigan participated in a FASB policy discussion along with CUNA staff on the proposal in February. During that meeting Hannigan highlighted the unique nature of credit unions and stressed the importance of understanding how the proposed standard will adversely affect credit unions and other smaller reporting entities that will be covered by the change.
Specifically, Hannigan cited the increased cost to credit unions, as well as concerns related to auditability and regulatory oversight, as a result of the proposal.
CUNA has a number of concerns with the proposal, and recently issued an action alert, which has resulted in 955 letters to FASB stating concerns with the proposal.