NAFCU requests additional clarity on simplified CECL tool from NCUA
NAFCU Regulatory Affairs Counsel James Akin wrote to NCUA Acting Chief Accountant Chris McGrath, urging the agency to provide additional clarity and guidance regarding the recently-introduced simplified current expected credit losses (CECL) tool. The NCUA created the NAFCU-supported tool to “help small credit unions comply with the Financial Accounting Standards Board’s accounting standard on CECL, which goes into effect for most credit unions at the start of 2023.”
In the letter, Akin highlighted that NAFCU supports the introduction of the Simplified CECL Tool as a cost-effective resource for credit unions to implement CECL. However, he offered a few recommendations for the agency to consider, noting:
- while the tool may be ideal for use by credit unions under $100 million in assets, the NCUA should issue guidance indicating that it can be used by credit unions up to $1 billion in assets;
- the NCUA should issue guidance about what factors and modifications credit unions between $100 million and $1 billion should consider in utilizing the tool; and
- the NCUA should avoid requiring credit unions to hire third parties to validate their CECL model; and
- the NCUA should issue guidance ensuring that credit unions have the same level of flexibility when validating the credit union’s allowance for credit losses methodology, as they did when validating their Allowance for Loan and Lease Losses methodology.
“NAFCU would like to thank the NCUA for its continued focus on providing credit unions with the tools and resources to implement CECL,” concluded Akin. “Thank you for your consideration and we look forward to working with you to make CECL transition simple for credit unions.”
To learn more on the CECL standard, read NAFCU’s Resources. NAFCU will continue to work with the NCUA to ensure that credit unions have the necessary resources and guidance to effectively implement CECL.
Add to Calendar 2022-09-29 14:00:00 2022-09-29 14:00:00 Coming Soon: CECL This is a deep-dive refresher into the requirements of the Current Expected Credit Losses (CECL) standard. ASC 326 (CECL) is the most significant accounting standard to impact credit unions in many years. Your credit union should be prepared to adopt CECL in 2023 – this will be an effort to make sure you have a sound calculation, appropriate accounting policies and sufficient disclosures. In this Coming Soon: CECL webinar, you’ll get a baseline understanding of the accounting decisions required by the standard, with a focus on those that have tripped up earlier adopters; lessons learned from previous adopters; best practices and key items to consider for your model on a go-forward basis. Key Takeaways Understand requirements of the CECL standard Analyze lessons learned and best practices from previous adopters Evaluate key items to consider for future maintenance of the CECL model(s) Register Now$295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until September 29, 2023.Go to the Online Training Center to access the webinar after purchase » Who Should Attend Presidents and CEOs CFOs Accounting titles NCRMs Risk titles Education Credits NCRMs will receive 1.0 CEUs for participating in this webinar CPA credit information is below; recommended 1.0 CPE credits. CPA Certification Credit Information Reviewer: Josie Collins, Senior Associate Director of Education, NAFCU Learning Objectives: See key takeaways Program Level: Basic Prerequisites Needed: None Advance Preparation Needed: None Delivery Method: Group Internet-Based Recommended CPE Credits: 1.0 credits Recommended Field of Study: Accounting – Technical About Our Webinars Our webinars are streamed live from NAFCU headquarters near Washington, DC. 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: NCRM, CPE
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