NAFCU’s concerns about the negative impact of the current expected credit loss (CECL) standard on credit unions – including increasing the cost of credit to consumers, constraining the amount of credit available and limiting credit unions’ abilities to make loans in the mortgage and personal loan spaces – were directly cited by Rep. Blaine Luetkemeyer, R-Mo., during Thursday’s House Financial Services Committee hearing.
In response, NCUA Chairman Rodney Hood said the agency is aware of the concerns and acknowledges that implementation of the standard will be difficult for smaller credit unions to manage. He also said the NCUA plans to seek more assistance from the Financial Accounting Standards Board (FASB) to address these issues.
Luetkemeyer has been a vocal critic of CECL and introduced legislation last Congress to force FASB to halt the standard’s implementation and study its economic impacts. He asked the panel of financial regulators testifying if they would support efforts to “stop and study” CECL; Hood indicated the NCUA would be supportive of that.
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