WASHINGTON–CUNA is calling on NCUA to do more to help credit unions prepare for the upcoming current expected credit loss (CECL) standard.
In a letter to NCUA Chairman J. Mark McWatters CUNA President/CEO Jim Nussle said the association has heard from credit unions of all asset sizes that CECL remains a “top concern.”
The CECL standard was finalized by the Financial Accounting Standards Board (FASB) in June 2016 and will go into effect for credit unions for fiscal years that begin after mid-December 2021.
Some credit unions, wrote Nussle, “have not yet elevated CECL preparation to a top priority simply because of a lack of information and understanding of how the standard will change current practices and how to begin implementing necessary changes.”
FDIC Model Suggested
CUNA urged NCUA to use as a model a joint webinar conducted last year by the FDIC and Federal Reserve Board that focused on how smaller, less complex financial institutions can implement CECL.
“The CECL effective date for credit unions and other non-public business entities (PBE) is not until fiscal years beginning after December 15, 2021,” Nussle wrote. “While this may appear to some to be far off, when you consider the amount of work required to adopt necessary changes—even if using a vendor—it is much closer than many credit unions may realize.”