Congressman Vicente Gonzalez (D-TX) filed HR 3182 on June 10 to stop the implementation of the Financial Accounting Standards Board regulation on current expected credit loss (CECL) and study it. A similar bill, S 1564 was filed in the Senate last month by Sen. Thom Tillis (R-NC).
Co-sponsors of the HR 3182 include three in the Cornerstone Credit Union League region, Rep. Henry Cuellar (D-TX), Rep. Roger Williams (R-TX), and Rep. French Hill (R-AR), as well as Rep. Blaine Luetkemeyer (F-MO), Rep. Brad Sherman (D-CA), Rep. David Scott (D-GA), Rep. John Gottheimer (D-NJ), Rep. Barry Loudermilk (R-GA), and Rep. Ted Budd (F-NC).
The bill would require the Securities and Exchange Commission and federal financial regulators, including the National Credit Union Administration, to study the potential impact of implementing CECL, including:
- The availability of credit;
- The accelerated depletion of regulatory capital;
- A system risk to the U.S. economy; and
- The disproportionate impact on financial institutions of various sizes and levels of complexity, their resources, and potential competitive impact.
The bill would also require a cost-benefit study to determine the impact of CECL on nonfinancial institutions, insurers, and government-sponsored enterprises. The report would be due to Congress within a year of enactment of the bill, and implementation of CECL would be delayed until one year after the report submission.
Twenty-five members of Congress signed a letter recently sent to the chairman of the Securities and Exchange Commission expressing concern about the effect of CECL on the health of the financial industry after implementation and urging the delay of the new standards until the effects on the economy are better understood.
Contact Jeff Huffman, Texas Credit Union Association, at 469-385-6488 or email@example.com for more information.