ALEXANDRIA, Va.—NAFCU staff met with NCUA's Office of Examination and Insurance here to discuss various concerns related to the Financial Accounting Standards Board's (FASB) current expected credit loss (CECL) standard. Among those participating were NAFCU EVP/General Counsel Carrie Hunt, VP-Research/Chief Economist Curt Long, Director of Regulatory Affairs Ann Kossachev, and Senior Counsel for Research and Policy Andrew Morris.
NAFCU said it during the meeting to better understand how the agency is approaching CECL, including examination and resources available for credit unions. The trade group had earlier joined with NCUA and other financial regulators to release a CECL FAQ document that addresses a variety of implementation issues, including effective dates, methods, qualitative factors, third-party vendors, supervisory expectations and more. That Q&A is available here.
NAFCU said it also stressed concerns about credit unions' unique capital framework, which limits the NCUA's ability to mitigate CECL's effect on net worth without action from FASB. As a result, NAFCU has urged FASB to exempt credit unions from this standard, and more flexibility with CECL compliance is also among the association's priorities for the NCUA Board to address.
Rep Raises Questions
Also last week, Rep. Blaine Luetkemeyer (R-MO) questioned CECL's impact on credit unions and banks, which could negatively impact their ability to lend to consumers in need, during a House Financial Services subcommittee hearing on barriers to minority homeownership.
"We appreciate the NCUA's receptiveness to our concerns regarding the current CECL standard, and we look forward to having an open and robust dialogue with the agency," said NAFCU Director of Regulatory Affairs Ann Kossachev. "We continue to hear from our member credit unions on this issue and will work to ensure that the credit union industry's voice is heard."
The NCUA's recently released CECL Exam Questionnaire that the agency said will be used during upcoming exams in 2019 can be accessed here.