CECL: NCUA accountant shares insights at A.C.
"CECL is the largest accounting change to hit [credit unions] in 40 years," said NCUA Chief Accountant Alison Clark as she shared insights to the Financial Accounting Standards Board's (FASB) current expected credit loss (CECL) standard Friday at NAFCU's Annual Conference.
During her presentation to hundreds of credit union leaders and board members, Clark sought to debunk myths about the standard, share accounting examples and offer tips for the NCUA's approach to CECL during examinations to help credit unions comply. She – and almost all attendees in the room – does not believe that credit unions will receive an exemption or carve-out from FASB, and advised that all credit unions, regardless of size, will need to follow CECL.
Given that the standard is more than 280 pages, Clark recommended a section to focus on: Start on page 95 and concentrate on the next 70 pages. She also shared a number of resources from the NCUA and other regulators, including the FAQ document – which Clark compared to the CliffsNotes version of the standard – released earlier this year. In addition, another interagency FAQ focused on reasonable and supportable forecast is expected to be released later this year.
Clark noted that under the standard, credit unions' historical losses, total losses, charge off guidance and credit risk will not change. As credit unions prepare to implement the standard, Clark outlined steps to follow and provided accounting examples on the WARM method.
The presentation ended with the NCUA's exam expectations: "NCUA does not expect the gold standard or perfection on Day 1," Clark said, but will look instead for "good faith efforts" to meet CECL compliance. She said the agency's CECL supervisory expectations for 2019 will likely be the same for 2020, and examiners will not issue CECL-related documents of resolution or supervisory findings this year or next. Credit unions will need to comply with CECL starting in 2022.
Clark also encouraged credit unions to answer examiners' questions about CECL truthfully, as she will take those conversations and assess what additional resources or educational outreach is needed to support credit unions' implementation efforts.
NAFCU has CECL resources available online.
Add to Calendar 2019-11-14 14:00:00 2019-11-14 14:00:00 What’s New and What’s Next with NAFCU’s Regulatory Affairs Team Prepare your credit union for the evolving regulatory landscape. Hear firsthand from the experts what's new coming out of Washington with NAFCU's Regulatory Affairs team! They'll provide you with an update on recent developments at the Consumer Financial Protection Bureau (CFPB) and National Credit Union Administration (NCUA), as well as other regulators. The team will also touch on what's coming next, including anticipated rulemakings that will affect your credit union. Key Takeaways: Review the NCUA’s latest efforts to modernize the capital framework for credit unions Discuss the recent CECL delay and the NCUA’s potential phase-in of the new accounting standard Walk through administrative and legislative efforts to reform the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac Understand the potential impact of changes to the CFPB’s Qualified Mortgage definition and the expiration of the GSE Patch Learn how to participate in the recent innovation-related policies from the CFPB Register Now Registration is free for members, but you must register to attend.$395 Nonmembers (Additional $50 for CD) One registration gives your entire team access to the live webinar and on-demand recording until November 14, 2020Already registered? Go to the Online Training Center to view. Who Should Attend? NAFCU Certified Compliance Officers (NCCOs) NAFCU Certified Risk Managers (NCRMs) NAFCU Certified Volunteer Experts (NCVE) Presidents, Chief Executive Officers Executive Vice Presidents Credit Union attorneys Credit Union counsels Board members and Board Chairs Compliance staff Risk staff Education Credits NCCOs will receive 1.5 CEUs for participating in this webinar. NCRMs will receive 1.5 CEUs for participating in this webinar. NCVEs will receive 1.5 CEUs for participating in this webinar. CPA credit information is below; recommended 1.5 CPE credits. CPA Certification Credit Information Reviewer: Josie Collins, Associate Director of Education, NAFCU Learning Objectives: Review the NCUA’s latest efforts to modernize the capital framework for credit unions. Discuss the recent CECL delay and the NCUA’s potential phase-in of the new accounting standard. Walk through administrative and legislative efforts to reform the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. Understand the potential impact of changes to the CFPB’s Qualified Mortgage definition and the expiration of the GSE Patch. Learn how to participate in the recent innovation-related policies from the CFPB. Program Level: Basic Prerequisites Needed: None Advance Preparation Needed: None Delivery Method: Group Internet-Based Recommended CPE Credits: 1.5 credits Recommended Field of Study: Regulatory Ethics - Technical National Association of Federal Credit Unions (NAFCU) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. Learn more. About Our Webinars Our webinars are streamed live from NAFCU headquarters near Washington, D.C. Your audio/video feed of the presenters includes presentation slides and downloadable handouts. You can easily submit your questions to the presenters at any time during the live broadcast, with no dialing over the phone! The audio and video stream directly through your computer. Web NAFCU firstname.lastname@example.org America/New_York public
Credits: NCCO, NCRM, NCVE, CPE
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