Credit unions consistently cite the current expected credit loss (CECL) standard as one of, if not the, biggest compliance challenge they are facing, and the Financial Accounting Standards Board (FASB) should search for any opportunities to provide relief to credit unions, CUNA wrote Wednesday. CUNA’s letter was sent to FASB, who issued CECL, in response to a proposed delay of the standard for credit unions to January 2023.
“We appreciate the Board’s recognition of the challenges entities—of all sizes and complexity—are encountering as they work to implement changes necessary to comply with these standards. Thus, we support the proposed changes to the effective dates, as such changes would be consistent with the Board’s proposed new effective date philosophy,” the letter reads.
“However, it is important FASB be aware that CUNA’s longstanding position has been and continues to be that application of CECL to credit unions is inappropriate…underfunding of allowance accounts has not generally been an issue for credit unions. Further, the typical user of a credit union’s financial statements is not a public investor—such as with large, public banks—but instead is the credit union’s prudential regulator, the NCUA,” it adds.
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