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June 05, 2017

NAFCU urges FASB to 'indefinitely suspend' CECL implementation

NAFCU President and CEO Dan Berger, in a letter Monday, recommended that the Financial Accounting Standards Board indefinitely suspend implementation of the "current expected credit losses" standard while the board reassesses the standard's requirements.

"NAFCU still strongly believes that credit unions – as member-owned, not-for-profit cooperatives – should never have been included within the scope of the [Accounting Standards Update] on credit losses," wrote Berger. "Credit unions' primary objective is to provide members with high-quality financial products and services."

He noted that credit unions' financial statements are examined by the NCUA, so accounting standards developed for publicly held entities are "inappropriate, costly, and resource-intensive" for the industry.

Berger urged the board to issue an amended accounting standard for the benefit of credit unions and all stakeholders so they can "share their perspective on an accounting standard that will necessitate the expenditure of considerable resources."

He added that if FASB did not take this approach, the board should approve a delay of the accounting standard that extends at least two years beyond the current effective dates.

Next week, FASB's Transition Resource Group for Credit Losses will hold a public meeting in Norwalk, Conn., to hear concerns on the current expected credit loss accounting standard. NAFCU staff will attend the June 12 meeting.

Credit unions can learn more about some of the key qualities and trade-offs under various CECL implementation models in a studyNAFCU released last month. The CECL accounting standard is currently scheduled to begin taking effect for credit unions in fiscal years beginning after Dec. 15, 2020.

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