NORWALK, Conn.–The Financial Accounting Standards Board (FASB) has agreed to delay the effective date its new current expected credit loss (CECL) standard until 2023, a move credit unions have been pushing for.
The move was announced following FASB’s board meeting today.
Both credit union trade groups, as well as credit unions themselves, have argued the new standard raises a host of compliance challenges for credit unions and more time is needed to prepare. Concerns have also been raised over how CECL will alter the financial standing of credit unions.
“While a formal Board vote is still to come, based on unanimous support at today’s meeting, a final standard delaying the CECL effective date until 2023 will become official in the coming weeks,” said Elizabeth Eurgubian, deputy chief advocacy officer and senior counsel with CUNA. “The CECL standard continues to be one of the biggest compliance challenges for credit unions, and CUNA has long called for additional time for credit unions to meet the standard. We appreciate the Board’s recognition of those challenges and we continue to advocate for sufficient compliance resources on behalf of credit unions.”
NCUA Board Chairman Rodney Hood supported FASB's decision.
“I am glad the Financial Accounting Standards Board chose the prudent course of delaying CECL until 2023," said Hood. "This will give more time for credit unions to implement the standard. The NCUA plans to phase in the capital impact of the new standard, which will provide relief to credit unions that could see large increases in their loan-loss reserves. We look forward to working with FASB to ensure credit unions get any necessary education and training assistance to implement the new standard.”