U.S. Senate bill filed to delay implementation of CECL

U.S. Sen. Thom Tillis (R-N.C.) filed SB 1564 on May 21 to stop the implementation of the Financial Accounting Standards Board regulation on current expected credit loss (CECL) and study it. Cosponsors include Sen. Tom Cotton (R-Ark.) from the Cornerstone region, along with Sens. Jerry Moran (R-Kan.), Kevin Cramer (R-N.D.), David Perdue (R-Ga.), and Mike Rounds (R-S.D.).

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.

In addition, the bill would 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. Members of the Cornerstone League delegation who signed the letter are:

• From Texas: Vicente Gonzalez, Roger Williams, Henry Cuellar, Jodey Arrington, and Lance Gooden; and
• From Arkansas: French Hill.

The Texas Credit Union Association has been in discussions with members of the Texas delegation about filing similar legislation to SB 1564 in the House.

Contact Jeff Huffman, Texas Credit Union Association, at 469-385-6488 or jhuffman@txcua.coop for more information.