The Financial Accounting Standards Board (FASB) should delay implementation of the current expected credit loss (CECL) standard to at least January 2024, CUNA wrote to FASB Wednesday, as credit unions are currently focusing on serving members affected by the coronavirus (COVID-19) pandemic. CECL, a new accounting standard that recognizes lifetime expected credit losses as opposed to the current “incurred-loss” approach, is currently scheduled to become effective for credit unions starting in January 2023.
“At this time, it is critical that credit unions be able to focus on serving their members, who are facing mounting financial pressures due to COVID-19. Therefore, we urge the FASB to begin the process to delay the effective date of the CECL standard as it applies to credit unions until at least January 2024,” the letter reads.
“In light of the current crisis, we urge the FASB to provide additional time for compliance. While some credit unions are in the final stages of preparation, the vast majority are in the very early stages of gathering necessary data and beginning to make the numerous changes required under CECL. A one-year delay will help ensure our nation’s credit unions—the median of which is well under $50 million in assets—are prepared to comply,” it adds.
CUNA also suggested the delay in CECL implementation in a letter sent this week to the administration outlining ways regulators and Congress could help credit unions better serve members in this time of need.