This month's special topic:
Debt Collection & CECL
Regulatory burden is still taking a toll on credit union financial conditions. Indeed, the industry continues to lose roughly one credit union per day to merger or liquidation. Amid this environment, recent and potentially forthcoming rules could force credit unions to increase their allowance for loan and lease losses (ALLL), which would only add to their difficulties. First, the CFPB has shown a great deal of scrutiny related to debt collection practices. If the bureau subjects credit unions to future rulemaking in this area, it could result in the need to increase the allowance account. Secondly, the Financial Accounting Standards Board recently finalized an accounting standards update (ASU) related to the current expected credit loss (CECL) model. While the final ASU incorporates a NAFCU-sought extension of the implementation date to 2021, it nevertheless represents a historic change to accounting practices among financial institutions.
NAFCU's Economic and CU Monitor is a NAFCU member-only monthly report of the latest macroeconomic and financial trends affecting today's credit unions, including trend data among NAFCU member credit unions.
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