WASHINGTON—NCUA has joined other federal financial regulators in updating a frequently asked questions document pertaining to the new current expected credit losses (CECL) accounting standard.
NCUA Chairman J. Mark McWatters notified credit unions of the additional information in a letter to credit unions (17-CU-05).
The agencies previously answered 24 questions in a December 2016 edition of the document, and the latest update adds an additional 14 questions and answers. While the regulatory reporting effective date of the new standard is not until Dec. 31, 2021, NCUA reiterates that steps need to be taken by credit unions in advance to ensure effective implementation, CUNA noted.
“The board of directors and senior management should become familiar with the new accounting standard to assess how the new standard differs from the existing incurred loss model. Once familiar with the standard, different allowance estimation methods should be evaluated for appropriateness within your credit union,” CUNA advised.
NCUA does not currently plan to begin evaluating a credit union’s implementation efforts until sometime after 2018. NCUA continues to work with the other federal banking agencies to develop uniform guidance and supervisory expectations, CUNA added.
The FAQ document will be expanded and released as new or updated FAQs are developed, and NCUA is planning webinars and classroom training for examiners and credit unions, CUNA said.