WASHINGTON–NCUA Chairman Rodney Hood said the agency is working to get more assistance from the Financial Accounting Standards Board regarding CECL.
During testimony before the House Financial Services Committee, Hood offered the update in response to a question from Rep. Blaine Luetkemeyer (R-MO) about whether or not he and other panelists who were also testifying would support efforts to “stop and study” the new accounting rules.
Hood said the agency would support such an approach.
“I share the concerns that have been raised, by the industry groups you’ve cited. We as an agency are also doing our own internal studies with our chief economist,” Hood remarked. “I find the operational burdens that are going to be imposed by CECL to really be difficult for our smaller credit unions to manage and operate in that environment. We will need some assistance from FASB to address some of these issues. I do have a little bit of confidence that a lot of our institutions, whether it be credit unions or community banks, will be exempted from doing a lot of the complex form of forecasting that’s required,” he added.
Luetkemeyer has been a critic of the new FASB standard, having submitted legislation in the prior Congress that would have delayed implementation of CECL. Several other members of the Committee also expressed concerns over the new rules.
No Delay Coming, FASB Says
While the credit union trade groups and members of Congress have called for pushing back the implementation date, a FASB representative recently told credit unions it isn’t going to happen, adding that many of the concerns he has heard are overblown.
As CUToday.info reported here, Shayne Kuhaneck, assistant director with FASB, told NAFCU’s CEOs & Senior Executives Conference CECL is coming and the Financial Accounting Standards Board has now moved beyond the rule itself and the focus is on training.
Other Issues Raised
Beyond CECL-related issues, Hood also testified that:
- He wants to see the NCUSIF return to a normal operating level of 1.3%
- He believes the agency should have greater flexibility in setting loan maturity limits, especially as a means of expanding access to mortgages
Joining Hood in testifying before the Committee were FDIC Chairman Jelena McWilliams, Comptroller of the Currency Joseph Otting, and Federal Reserve Vice Chair for Supervision Randal Quarles.
As CUToday.info reported here, Hood and the other three witnesses also testified before the Senate on Wednesday. That report includes a link to a full copy of Hood's statement.