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NAFCU meets with NCUA to discuss CECL
NAFCU’s award-winning advocacy team Tuesday met with the NCUA to discuss the impending implementation of the current expected credit loss (CECL) accounting standard. The meeting follows NAFCU President and CEO Dan Berger’s meeting with Financial Accounting Standards Board (FASB) members Sue Cosper and Fred Cannon earlier this month, during which the group discussed an exemption for non-public filers, including credit unions, from compliance with the CECL standard. During the meeting, NAFCU discussed with the NCUA additional resources to determine an acceptable method for calculating CECL.
The association has long advocated for this exemption, highlighting the tremendous burden CECL imposes upon credit unions. NAFCU has also expressed that the NCUA’s limited authority to accommodate CECL’s impact on net worth, in addition to an already limited availability to capital, would leave credit unions and their members disproportionately impacted.
Berger in October wrote to FASB Chairman Richard Jones requesting that FASB exempt all non-public fliers from compliance with the CECL standard in 2023, saying “given the continued threat of economic uncertainty and credit unions’ conservative tendencies, CECL’s forecasting requirement would likely to lead to upwardly-biased loss estimates.”
In a separate letter to FASB, Berger also suggested a roundtable for smaller financial institutions including credit unions, to discuss the impacts of the adoption of CECL.
NAFCU has met with the NCUA staff to discuss CECL on many occasions to ensure additional resources are provided to credit unions. The association will continue to engage with both the NCUA and FASB to obtain relief for credit unions and help mitigate the burdens of adopting this standard.