CUNA
  • Advocacy
    • Priorities we’re fighting for
    • Actions you can take
  • News
  • Learn
  • Compliance
  • Shop
  • Topics
    • Community Service
    • Compliance
    • Credit Union Hero
    • Credit Union Rock Star
    • Credit Union System
    • Directors
    • Human Resources
    • Leadership
    • Lending
    • Marketing
    • Operations
    • Policy & Issues
    • Sales & Service
    • Technology
  • Credit Union Magazine
    • Buyers' Guide
    • COVID-19
    • Digital Edition
    • Credit Union Hero
    • Credit Union Rock Star
    • Subscribe
    • Advertise
    • Contact
  • COVID-19
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Contact
Learn More about Member Value

News

Member Benefits
Learn more
Learn more about the benefits of membership.
Home » Congress can ensure sufficient information on CECL impact
Policy & Issues

Congress can ensure sufficient information on CECL impact

January 15, 2020

The Financial Accounting Standards Board’s (FASB) current expected credit losses (CECL) standard will have a significant impact not only on covered financial institutions but also consumers and the broader economy, CUNA wrote to a House subcommittee Wednesday.

The House Financial Services subcommittee on investor protection, entrepreneurship and capital markets conducted a hearing with FASB Wednesday.

During the hearing, Rep. Blaine Luetekemeyer (R-Mo.) cited a CUNA study showing it will cost credit unions $14-15 billion to implement CECL.

During yesterday’s @FinancialCmte and @FSCDems hearing on @FAFNorwalk, @RepBlaine shared our concerns over #CECL’s burden on #CreditUnions. #CUAdvocacy pic.twitter.com/TpyEpzxA4A

— CUNA (@CUNA) January 16, 2020

CECL is new accounting standard that changes the accounting for credit losses, a standard that recognizes lifetime expected credit losses as opposed to the current “incurred-loss” approach. CUNA advocacy helped lead to FASB to delay implementation of CECL for credit unions to January 2023.

“CUNA continues to maintain its longstanding position that application of CECL to credit unions is inappropriate since CECL is intended to address delayed recognition of credit losses resulting in insufficient funding of the allowance accounts of certain covered entities,” the letter reads. “Underfunding of allowance accounts has not generally been an issue for credit unions. Further, the typical user of a credit union’s financial statements is not a public investor—such as with large, public banks—but instead is the credit union’s prudential regulator, the National Credit Union Administration.”

While CUNA understands and supports FASB’s independence, it urges Congress to utilize the authority it does have in order to improve CECL, or “at a minimum, ensure there is sufficient, relevant information regarding CECL’s impact from which future decisions can be made.”

CUNA supports the CECL Consumer Impact and Study Bill of 2019, introduced by Reps. Vicente Gonzalez (D-Texas) and Ted Budd (R-N.C.).

The legislation would delay implementation of CECL by one year and require the Securities and Exchange Commission, in consultation with FASB to conduct a study on:

  • The potential effect CECL implementation may have on the accessibility of credit, particularly consumers and small businesses;
  • Any potential systematic risks CECL may pose during a recession;
  • The potentially disproportionate burden on smaller, less complex financial institutions; and
  • The potential competitive effect it might have on the U.S. as a result of differing international accounting standards.

KEYWORDS cecl
Credit Union Magazine - Winter 2020

Winter 2020

Credit Union Magazine’s Winter 2020 edition features CUNA’s 2021 lending outlook, CEO insights on adjusting to the pandemic, and board recruitment strategies.
Digital Edition •  Subscribe

Trending

  • Compliance: 2020 Year in Review, Checklist now available

  • NCUA proposes raising threshold for ‘complex’ CUs

  • 5 fraud predictions for 2021

Tweets by CUNA_News

Polls

Will you ask employees to receive the coronavirus vaccine?

View Results
More

Champion of America’s Credit Unions

Credit Union National Association is the only national association that advocates on behalf of all of America’s credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • About
  • Careers
  • Contact Us
  • Recommended Websites
  • Privacy Policy

Resources for

  • CUNA Board Members
  • Credit Union Advocates
  • Leagues
  • Press
  • Vendors