WASHINGTON—Citing compliance concerns, NAFCU, CUNA and seven other financial services industry trade groups are urging the Financial Accounting Standards Board (FASB) to delay the implementation of its current expected credit loss (CECL) standard.
In a letter to FASB and the Securities and Exchange Commission (SEC), which has primary oversight of FASB, the trade groups argued that a delay would give companies more time to consider alternatives and conduct a quantitative impact analysis.
"Time for further assessment will also allow regulators to better understand and address the key consequences of any proposal for capital and other regulatory purposes," the groups wrote.
In addition, the trades acknowledged FASB's intention to "provide investors with better information," but highlighted a number of concerns with CECL's impact, including:
- A negative impact on long-term lending
- Being "procyclical" and disincentivizing lending particularly during economic downturns
- Exacerbating many of the hurdles of extending credit institutions already face in the wake of increased capital requirements