CUNA News
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • 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
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Jobs
  • Contact

News

Home » NCUA releases simplified CECL tool for small credit unions
Policy & Issues

NCUA releases simplified CECL tool for small credit unions

September 14, 2022
CECL is coming: Are you ready?

NCUA released a new tool Wednesday to help small credit unions comply with the current expected credit loss (CECL) standard, which goes into effect for most credit unions Jan. 1, 2023. CUNA has called on NCUA to provide guidance to credit unions on CECL implementation, starting back when NCUA first proposed its transition methodology, and addressed the need during engagement with the agency.

The Simplified CECL Tool is intended for use by credit unions with under $100 million in assets, although it could be used by larger credit unions based on the discretion of their management and auditors.

The NCUA recognizes credit unions need time to evaluate which CECL methodology is appropriate for their size and complexity. The Simplified CECL Tool will be updated for use with the quarters ending Sept. 30, 2022 and Dec. 31, 2022 to allow credit unions to test and calibrate the tool. It will be updated each quarter after that.

The tool uses the Weighted Average Remaining Maturity (WARM) methodology to estimate the allowance for credit loss. The tool requires a credit union to enter its charter number, total assets, and loan portfolio balances. The loan portfolio categories in the tool mirror the categories in NCUA’s Call Report.

For each loan portfolio category, the tool calculates the credit union’s net charge-off rate from its Call Report data and provides the industry-based WARM factor.

The tool also allows the credit union to make qualitative adjustments for current conditions and reasonable and supportable forecasts, as required by CECL.

The Simplified CECL Tool, along with FAQs, a user guide, and information on the model used, is available on the NCUA website, CECL Resource Center.

KEYWORDS CECL NCUA
Credit Union Magazine: Winter 2022

Winter 2022

Credit Union Magazine’s Winter 2022 issue highlights data-driven marketing, the board’s role in cybersecurity, elder abuse scams, credit unions’ auto lending advantage, and more.
Digital Edition •  Subscribe

Trending

  • House passes CUNA, League-led board modernization bill

  • CFPB issues CUNA-opposed proposal on credit card late fees

  • Key committee leaders supportive of credit union priorities

Tweets by CUNA_News

Polls

Vote for the 2023 CU Hero of the Year

View Results
More

Champion for the Credit Union Movement

Credit Union National Association is the most influential financial services trade association and 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

  • Membership
  • Contact Us
  • Careers

Resources for

  • Credit Union Advocates
  • Leagues
  • Press
  • Providers

Our Affiliates

  • American Association of Credit Union Leagues (AACUL)
  • Credit Union Awareness
  • Credit Union House
  • CUNA Strategic Services
  • National Credit Union Foundation
GET CUNA UPDATES
© 2023 Credit Union National Association | ADA Compliance Notice & Legal
Email Us