Newsroom

The Financial Accounting Standards Board (FASB) during a meeting this week discussed three options to clarify the transition and effective dates of its current expected credit losses (CECL) standard. NAFCU has shared with the board the impact CECL will have on credit unions and still strongly believes that credit unions should not be included within the scope of the standard.

The standard as currently written has created confusion among covered entities: effective dates were to be tiered in order to allow smaller, less-complex financial institutions more time to implement the standard. However, the language would effectively require both non-SEC filer public business entities (PBE) and non-PBEs (which includes credit unions) to adjust their retained earnings as of Jan. 1, 2021. This negates the benefit to credit unions of having an additional year to implement the guidance.

In June, NAFCU attended a FASB Transition Resource Group meeting on CECL, during which FASB indicated that it would be issuing guidance clarifying that credit unions would not need to begin reporting data on losses on call reports until the beginning of 2022. The additional time will allow credit unions to see how business entities report the data and how auditors and regulators approach the standard.

Board members this week discussed alternative amendments for the implementation date for non-PBEs but a proposed change has yet to be formally issued.

NAFCU will stay connected with FASB on its CECL standard clarification and offer input when the proposal is issued. The association also has a number of tools available online as credit unions prepare for implementation.