At NAFCU’s Congressional Caucus last month, NCUA Board Chairman Rodney Hood announced that the agency has the authority to phase in the Financial Accounting Standards Board’s (FASB) current expected credit loss (CECL) standard. NCUA Board Member J. Mark McWatters – in a new op-ed – provides further clarifications to this and other recent developments that will help credit unions in their CECL transition.
NAFCU has shared its concerns about the CECL standard – from its implementation burdens to its impact on credit unions’ capital – since the Financial Accounting Standards Board (FASB) issued the standard in 2016. NAFCU’s advocacy has obtained relief for credit unions; FASB is currently considering an additional one-year delay of CECL for credit unions.
McWatters, in the Credit Union Journal op-ed, explains that “the NCUA’s general counsel determined the NCUA board has the authority to phase in the day-one adverse effects on regulatory capital that may result from the adoption of CECL.” Similar to recent relief given to banks, McWatters says he would support – and hopes the NCUA soon acts on – a rule that would phase in CECL’s impact on credit unions’ net-worth ratios over three years.
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