NCUA, along with the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency, issued a request for comment on a proposed interagency policy statement on allowances for credit losses. The proposed policy statement is designed to promote consistency in the interpretation of the Financial Accounting Standards Board’s (FASB) credit losses accounting standard, which introduces the current expected credit loss (CECL) methodology.
The proposed statement describes the measurement of expected credit losses using CECL and updates concepts and practices detailed in existing supervisory guidance that remain applicable. FASB agreed this week to defer the effective date of CECL for credit unions and other institutions to 2023, while it is effective for certain public companies in 2020.
The agencies also are requesting comment on the proposed interagency guidance on credit risk review systems. The guidance presents principles for establishing a system of independent, ongoing credit risk review in accordance with safety and soundness standards.
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