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Kansas, Missouri U.S. House Members Sign FASB Letter Outlining Concerns

Eight U.S. Representatives from the Missouri and Kansas delegations showed their support for credit union matters by signing a letter addressing concerns to the Financial Accounting Standards Board (FASB). The letter was signed by 62 members of Congress. FASB is in the final stages of reviewing a proposed standard that would change the accounting method for assessing credit impairment, a proposal that could have significant impact on lending in communities for credit unions. 

The U.S. Representatives that signed the letter to FASB Chairman Russell Golden include the entire Kansas U.S. House delegation and four U.S. House members from Missouri:

William “Lacy” Clay (D-District 1)
Ann Wagner (R-District 2)
Blaine Luetkemeyer (R-District 3)
Sam Graves (R-District 6)
Tim Huelskamp (R-District 1)
Lynn Jenkins (R-District 2)
Kevin Yoder (R-District 3)
Mike Pompeo (R-District 4)

The proposed FASB changes would require a “current expected credit loss” (CECL) model instead of the currently used “incurred loss” approach. This would require credit unions and other financial institutions to hold additional capital well above current loan loss reserves, affecting consumers’ access to credit. 

The Congressional letter states, in part:  “If the new method dictates an unwarranted level of reserve for each loan, based on a theoretical model and contrary to a community banker or credit union’s informed judgment, it will sharply increase the cost of lending and constrict the flow of credit.” 

Click here to read the entire letter.

The letter from 62 members of Congress is the latest effort to address concerns with the FASB proposal. Both the Missouri Credit Union Association and Kansas Credit Union Association wrote comment letters in 2013 during the comment period, along with the Credit Union National Association (CUNA). This was followed by two additional letters from CUNA, and individual and group meetings.

Credit union representatives are scheduled to attend a FASB roundtable to reiterate concerns with the proposal on February 4.