NORWALK, Conn.–The Financial Accounting Standards Board has announced a delay in the implementation date for its new current expected credit loss (CECL) standard for an additional year for credit unions, pushing back the compliance date until 2023.
Both credit union trade associations have been pushing for the delay.
“We appreciate FASB considering credit unions’ concerns and moving forward with a delay of the CECL standard and committing itself to conducting a cost-benefit analysis to better understand this new standard’s impact on consumers, credit unions and the economy as a whole,” said NAFCU Chief Economist and Vice President of Research Curt Long. “NAFCU will continue to advocate for credit unions to be exempt from this onerous and costly accounting standard as it could adversely affect credit unions’ capital levels immediately upon implementation. More so, credit unions did not cause or contribute to the financial crisis or the poor lending conditions that led the FASB to consider a new standard.”
Added Elizabeth Eurgubian, deputy chief advocacy officer and senior counsel with CUNA, "While the proposed one-year delay will help small credit unions come into compliance with this rule, the fact remains that CECL is a solution in search of a problem. We maintain that CECL will only hinder credit unions’ ability to uplift low-income borrowers and maintain that a quantitative impact study is critical to understand the far-reaching effects of CECL, including its impact on credit availability.”