FASB votes to extend CECL deadline to January 2023

The Financial Accounting Standards Board (FASB) agreed Wednesday to propose a one-year delay in the implementation date for the current expected credit loss (CECL) standard as it applies to credit unions, moving it to January 2023 (from January 2022). The proposed changes will be subject to a 30-day comment period, which will begin once the proposal is officially released.

Cornerstone joins CUNA, NAFCU, and other leagues in arguing that credit unions should not be subject to CECL. Under the CECL standard, institutions will have to recognize the expected lifetime losses at the time a loan or financial instrument is recorded.

"We are very pleased that the FASB board voted to give credit unions and other lenders a temporary reprieve from the CECL standard,” said Cornerstone Credit Union League President/CEO Caroline Willard. “However, given their unique structure, the CECL standard should not be applied to credit unions at all. Cornerstone will continue to work with FASB, members of Congress, and other stakeholders on solutions to CECL, including an impact study to understand the far-reaching effects of CECL on credit availability."   

FASB released Wednesday a second question-and-answer document covering several topics, including use of historical loss information, making forecasts, and more. The agency also announced a series of training sessions in the planning stages, which will take place around the country to help small institutions with CECL implementation.