I attended NAFCU’s Congressional Caucus last week and heard many Washington insiders broadly supporting credit union efforts. But, my ears really perked up hearing good news regarding CECL deployment: NCUA Chairman Rodney Hood explained to the credit union leaders in attendance that the agency has the authority to phase in FASB’s Current Expected Credit Losses accounting standard. “And I am delighted to announce the agency’s General Counsel has determined the NCUA Board has the authority to phase-in the effects of FASB’s Current Expected Credit Losses accounting standard, or CECL, on credit union net worth ratios,” Chairman Hood said. “This will go a long way toward providing relief to credit unions that could see relatively large increases to their loan loss reserves when the new accounting standard becomes effective.” What a pleasant surprise! See how Ser Tech’s ProAct can help you collect all the data you need for CECL compliance! Chairman Hood also acknowledged that many credit unions are worried about the operational impact CECL will have on them. He continued, “I know many of you are also concerned about the operational burdens associated with CECL. The NCUA and other banking agencies have been working with the Financial Accounting Standards Board to provide clarifications and training on practical methods for credit unions and community banks to calculate estimates under CECL. FASB has provided simplified options that would be acceptable to estimate allowances for less-complex financial asset pools.” Many credit unions should fall into this category. “In particular, I want to thank FASB for listening to our concerns and issuing a second question and answer document that recognizes that ‘reasonable and supportable forecasts’ required by CECL can be scaled to the size and complexity of the institution and do not necessarily require modeling or economic forecasting. We will continue to work with our partners to provide information and training on these new standards.” Even though, FASB has extended the compliance date for credit unions and other nonpublic entities until January 2023, as discussed in this previous blog , credit unions must be vigilant in their preparation. Ser Tech can help you collect all the data, no matter the size of your credit union, so you’re ready to make informed, supportable forecasts. Experts have said many credit unions will be required to reserve more against the expected losses now that it would be extended over the life of the loan, so don’t wait until the last minute!