Regulators update CECL FAQ document

Along with other federal financial regulators, the National Credit Union Administration posted a frequently asked questions document on the current expected credit loss (CECL) standard.

CECL will apply to all credit unions, banks, savings associations, and financial institution holding companies for which the reporting requirements conform to U.S. generally accepted accounting principles (GAAP). The notice makes clear that until CECL becomes effective, financial institutions must continue to follow current U.S. GAAP on impairment and the allowance for loan and lease losses (ALLL). Existing ALLL policy statements and guidance will not be rescinded until CECL is effective for all institutions.

For credit unions, which are considered non-public business entities under the standard, CECL is effective for fiscal years beginning after Dec. 15, 2021, including interim periods within those fiscal years. For those using the calendar year fiscal year, the standard is effective Jan. 1, 2022, with the application of CECL methodology applied in its financial statements and Call Reports for the quarter ended March 21, 2022.

The agencies plan to issue proposed supervisory guidance on allowance for credit losses under CECL before the first mandatory effective date for the new accounting standard. The regulators have issued FAQs in December 2016 and September 2017. This document updates several questions from previous versions and adds nine question-and-answer sets.

Registration is also still open for an April 11 webinar on CECL conducted by financial regulators.

Cornerstone Credit Union League is also offering several upcoming CECL Roundtables as follows:

• Oklahoma City, May 7
• Little Rock, May 8
• Plano, May 9

Learn more.

Source: CUNA News