CUNA met with Financial Accounting Standards Board (FASB) Chair Russell Golden Wednesday to discuss several credit union issues, including concerns with the recently finalized current expected credit loss (CECL) standard. The new standard, expected to be published in June, contains several CUNA-sought improvements over the version first proposed in 2013.
During the meeting, CUNA stated the importance of FASB’s Transition Resource Group that was developed to assist with the implementation of the impairment standard. Credit unions are represented on the group by two CUNA members, Susan Hannigan, chief financial officer at Jeanne D’Arc CU, Lowell, Mass., and Doug Wright, chief financial officer at Mission FCU, San Diego.
The resource group will be helpful in filtering questions and issues to FASB as they arise as credit unions and other entities begin to comply with the standard, which goes into effect in 2021 for credit unions.
In addition to a delayed effective date, FASB made several other positive changes to the impairment standard. In particular, FASB announced changes that will provide additional flexibility, stating that there is no one methodology that entities must use.
This is a major improvement that CUNA specifically advocated for in a March letter to Golden.
Also during Wednesday’s meeting, CUNA requested additional guidance for credit unions. Golden said that FASB plans to release such guidance around the same time the final standard is issued, which is expect to occur sometime in June.
Throughout the meeting, CUNA staff emphasized the credit union difference and urged FASB to recognize the uniqueness of credit unions in each standard it puts forward. CUNA believes that accounting standards intended for large, publiclytraded banks are often inappropriate when applied to credit unions.
The meeting was attended by CUNA Chief Operating Office Rich Meade, Chief Policy Officer Bill Hampel, Deputy Chief Policy Officer Elizabeth Eurgubian and Senior Director of Advocacy and Counsel Luke Martone. In addition to Golden, FASB was represented by Financial Accounting Foundation (FAF) Trustee John Dugan and Governmental Accounting Standards Board Technical Director David Bean.
The meeting followed a dinner held FAF, the organization that oversees FASB. Rick Ketchum, chair/CEO of the Financial Industry Regulatory Authority, discussed the importance of accurate accounting standards at the dinner, which CUNA attended.