FASB Proposes Delay of CECL Implementation to Jan. 2023

“While the proposed one-year delay will help small credit unions come into compliance with this rule, the fact remains that CECL is a solution in search of a problem,” said CUNA Deputy Chief Advocacy Officer Elizabeth Eurgubian. “We maintain that CECL will only hinder credit unions’ ability to uplift low-income borrowers and maintain that a quantitative impact study is critical to understand the far-reaching effects of CECL, including its impact on credit availability.”

Specifically, FASB’s proposal would change the effective date structure for CECL to account for two groups with difference effective dates, instead of the current structure with three groups: Securities and Exchange Commission (SEC) filers; public business entities that are not SEC filers; and non-public business entities. Credit unions fall under the non-public business entity category.

The proposal would simply create two groups, SEC filers (except for small reporting companies as defined by the SEC) and all others, including credit unions.

FASB staff also released Wednesday a second question and answer document covering several topics, including use of historical loss information, making forecasts and more.

FASB staff also announced it is planning a series of training sessions around the country to discuss issues addressed in the document and to help small institutions with CECL implementation.

Additional Coverage:

Credit Union Times – CECL to be Delayed Additional Year for Credit Unions.