The Financial Accounting Standards Board’s (FASB) current expected credit losses (CECL) standard is the most significant change in accounting rules to hit the financial services industry in decades. But there is a fundamental misalignment between FASB’s objectives in developing the CECL standard and the credit union industry.
We maintain that credit unions should not be subject to CECL because they were not a part of the poor lending practices that precipitated the financial crisis. Policymakers must consider the impact of the CECL standard on credit unions and their members.
How This Impacts You
The CECL standard will affect credit union capital, reserves for expected losses, necessitate development of new forecasts, and ultimately lead to increased compliance costs – both in dollars and staff time – that many credit unions cannot afford.
Exempt Credit Unions from the CECL Standard
Urge policymakers to consider the impact of the CECL standard on credit unions and their members.