NCUA chairman backs NAFCU's call for CU CECL exemption
NCUA Chairman Rodney Hood Thursday called on the Financial Accounting Standards Board (FASB) to exempt credit unions from the current expected credit loss (CECL) standard. Since 2016, when the standard was issued, NAFCU has continuously urged FASB to exempt credit unions from the standard due to their unique capital framework and the negative impact the standard could have on the industry.
"We applaud NCUA Chairman Rodney Hood for urging the Financial Accounting Standards Board to exempt credit unions from complying with FASB's CECL standard," said NAFCU President and CEO Dan Berger. "NAFCU has pushed hard for credit unions to be exempt from this onerous and costly accounting standard as it could place significant strains on credit unions' capital levels, particularly amid the coronavirus pandemic."
NAFCU has worked closely with the NCUA to reduce CECL's burden on the industry, most recently asking the agency to press FASB for more relief for credit unions in a discussion with NCUA Board Member J. Mark McWatters last week. NAFCU also reiterated its CECL concerns to Hood during a February meeting; NAFCU has consistently shared these concerns with Hood since he took office last year.
Amid the coronavirus pandemic, NAFCU and lawmakers have raised concerns about CECL compliance hindering financial institutions' ability to effectively address consumers' financial needs. The CARES Act provided temporary relief under CECL through the end of the year, but the standard isn't effective for credit unions until 2023. NAFCU has included an extended delay for credit unions in its recommendations to Congress for future relief packages.
In his letter to FASB, Hood said "the compliance costs associated with implementing CECL overwhelmingly exceed the benefits. Even before the current pandemic, credit unions had approached the NCUA with concerns about the unintended consequences of requiring credit unions to implement CECL."
"In our current environment, I am especially concerned that adopting CECL will have a chilling effect on lending, including loans to low-income borrowers," Hood added.
Given that almost 70 percent of credit unions under the NCUA's supervision are under $100 million in total assets and will face significant data collection challenges under CECL, Hood argued that the standard "provides insufficient advantages over the incurred loss model to support implementing CECL in the credit union system."
NAFCU maintains that credit unions should not be subject to CECL and will continue to work with FASB and the NCUA to obtain relief for the industry. The association has numerous resources available to credit unions as they prepare to implement the standard.
Add to Calendar 2020-12-14 14:00:00 2020-12-14 14:00:00 Understanding Current Expected Credit Losses (CECL) Hear directly from the Financial Accounting Standards Board (FASB) staff regarding the credit loss accounting standard – Current Expected Credit Losses (CECL). In addition to covering recent FASB staff Q&A documents, including the Weighted Average Remaining Maturity (WARM) method, the FASB staff will answer your questions. PROGRAM UNDERWRITTEN BY Key Takeaways Review FASB’s Post Implementation Review activities regarding CECL Understand the Weighted Average Remaining Maturity (WARM) method Learn more about other FASB Staff CECL Q&A documents Register Now For On-Demand AccessRegistration is complimentary, but you must register to attend.One registration gives your entire credit union access to the on-demand recording until December 14, 2021.Already registered? Go to the Online Training Center to view live. Who Should Attend? Chief Executive Officers (CEOs) Chief Financial Officers (CFOs) Accounting titles Education Credits 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 FASB’s Post Implementation Review activities regarding CECL. Understand the Weighted Average Remaining Maturity (WARM) method. Learn more about other FASB Staff CECL Q&A documents. 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: Accounting – 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
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