A bipartisan group of Representatives, and the head of the Federal Deposit Insurance Corporation, have echoed CUNA’s call to the Financial Accounting Standards Board (FASB) to delay the current expected credit loss (CECL) standard due to the coronavirus disease (COVID-19) pandemic. CUNA wrote to FASB this week saying a delay in implementation until at least 2024 would be appropriate.
CECL is a new accounting standard that recognizes lifetime expected credit losses as opposed to the current “incurred-loss” approach and is currently scheduled to become effective for credit unions in January 2023.
“[O]ne thing is clear. CECL should not be adopted during the current coronavirus outbreak and economic downturn. It would hurt our economy at a time of crisis,” reads the letter, signed by Reps. Brad Sherman (D-Calif.), Vicente Gonzalez (D-Texas), Josh Gottheimer (D-N.J.) and Blaine Luetkemeyer (R-Mo.).
FDIC Chairman Jelena McWilliams called on FASB Thursday to permit financial institutions subject to the CECL methodology an option to postpone implementation.