ALEXANDRIA, Va.–A final interagency policy statement related to the new CECL accounting standard and as well as discussion of issues related to allowance for credit losses (ACLs) at credit unions will be on the agenda of the NCUA board when it meets next week.
NCUA joined with other financial regulators in first issuing its CECL proposal in October of 2019. In that statement, NCUA and the other agencies outlined a methodology under CECL for determining ACLs at financial institutions that are applicable to financial assets measured at amortized cost, including loans held-for-investment, net investments in leases, held-to-maturity (HTM) debt securities, and certain off-balance-sheet credit exposures.
The agencies’ statement also offered proposed updates on “concepts and practices” in existing allowance for loan and lease losses (ALLL) they said remain “relevant.”
In a joint statement, the agencies said, “These concepts and practices relate to management’s responsibilities for the allowance estimation process, including the need to appropriately support and document the institution’s allowance estimates; the board of directors’ responsibilities for overseeing management’s processes; and the role of examiners in reviewing the appropriateness of an institution’s ACLs as part of their supervisory activities.”
Also on the agenda of the Thursday meeting:
- Consideration of a proposed rule on corporate credit unions (under part 704 of agency regulations)
- Two briefings: the first on mortgage rates, the second the quarterly NCUSIF update