How CECL will affect CUs purchasing loan pools

We’re discussing the various impacts of CECL on loan pool purchases and how those loans fit into a CECL model. We’ll explore how your credit union can determine credit deterioration when purchasing a pool, the effects of loan pool conversions to CECL models, and more.

Key Takeaways:

  • [02:46] Under CECL all your loans are treated like you originated them whether you originate them or you purchase them.
  • [12:56] If you buy a loan that has a ten-year life, theoretically you need ten years of data or ten years of some kind of loss history.   
  • [15:06] Go to your vendors, make sure they are giving you good data sets. You may have to tell them what you need. The biggest problem you’re going to have is the inconsistency in data between different vendors.

 

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