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Call to Action: Voice Concerns Regarding FASB's CECL Proposal

The Heartland Credit Union Association (HCUA) urges Kansas and Missouri credit union advocates to contact the Federal Accounting Standards Board (FASB) with concerns about its Current Expected Credit Loss (CECL) proposal. The CECL proposal changes the way credit unions determine losses. It would require credit unions to expand loan loss reserves, and it could have a chilling effect on lending services provided by credit unions, along with other financial institutions. 

Visit the Grassroots Action Center and send a letter to FASB Chair Russell Golden. HCUA encourages credit union leaders to personalize the communication by providing your credit union name and location, who you serve, your role (staff who works with members, volunteer board member, etc.) and how it could potentially affect your credit union and its members.

The CECL proposal would utilize a single "expected loss" measurement for the recognition of credit losses, which would replace the multiple existing impairment models in the U.S. that generally use an "incurred loss" approach. Under the proposal, the reporting entity would be required to estimate the cash flows that it does not expect to collect, using all available information, including historical experience and forecasts about the future. 

The Heartland Credit Union Association has worked together with the Credit Union National Association (CUNA) on this issue.  Initial comment letters were sent by the Missouri Credit Union Association and Kansas Credit Union Association in 2013, when it was initially proposed. In January, members of the Kansas and Missouri delegation signed a letter from 62 members of Congress to FASB, highlighting concerns with these proposed changes. A meeting with FASB also  took place on February 4. While a deadline for the final rule is not known, the call to action is in place in anticipation that the FASB is gearing up for its release. 

If you have questions on this issue, please contact Amy McLard, 314.542.1370.