FASB’s current expected credit loss (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.
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.
Add to Calendar2017-04-17 00:00:002017-04-17 00:00:00CECL Study: Alternatives, Impacts, Accuracy, and Complexity
Real data results of 5 implementation models for building your CECL roadmap
FASB's new Current Expected Credit Loss (CECL) accounting standard provides a considerable amount of flexibility in implementation, which makes it difficult for lenders to assess the options available and potential impact and trade-offs. Furthermore, lenders must be able to defend their implementation approach to validators, auditors, and examiners. With a rule like this looming over and threatening your bottom line, that choice is significant, and it's vital to start your planning immediately.
NAFCU, along with Allied Solutions and OnApproach, has teamed up with renowned data scientists at Deep Future Analytics to test a series of 5 models for implementing the new loan loss rules based on real data. The results of this study quantify the pros and cons of the models, and will help you determine the best course of action for your credit union's CECL implementation.
Use this study to gain data-driven insight on how to build your roadmap to implementation, reach an effective decision, and ultimately better defend your chosen model.
Download the Executive Summary
Download the full CECL Study