WASHINGTON—NAFCU has shared concerns about the effects of the current expected credit loss (CECL) standard on credit unions in a letter sent to the House Financial Services Committee's Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets.
The letter arrived ahead of an oversight hearing of the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board.
“Impact on credit union capital levels from the CECL standard could likely result in credit unions making fewer loans to members primarily in the mortgage and commercial loan space,” wrote Janelle Relfe, NAFCU’s associate director of legislative affairs. “CECL represents a seismic shift in the way credit unions have traditionally accounted for credit losses.”
Relfe also reiterated NAFCU’s dedication to educating its members about CECL. The association said it has continuously engaged with FASB and will maintain collaboration with the NCUA to communicate the need for relief and further guidance. FASB in November finalized a delay to CECL, pushing credit unions' compliance to 2023.