The New York Credit Union Association — along with the California and Nevada Credit Union Leagues, the Heartland Credit Union Association and the Carolinas Credit Union League — penned a joint-letter to congressional leaders outlining concerns with the Current Expected Credit Losses accounting standard.
The letter was addressed to Reps. Maxine Waters (D-Calif.) and Patrick McHenry (R-N.C.), the chairwoman and ranking member of the House Financial Services Committee; as well as Reps. Gregory Meeks (D-5) and Blaine Luetkemeyer (R-Mo.), the chairman and ranking member of the Subcommittee on Consumer Protection and Financial Institutions.
In the letter, the leagues called on the members of Congress to hold public hearings on the new CECL standards “to discuss and better understand what is at stake and how financial institutions are preparing for what will be a major shift in policy.”
As previously reported, the Financial Accounting Standards Board has voted to delay the implementation of CECL for credit unions until 2023. However, the leagues wrote, the delay does not mitigate their overall concerns with the new standards, which would have a significant impact on credit union accounting practices.
“Congress needs to carefully evaluate the longer term impact before credit unions and other lenders are required to implement this standard,” they wrote. They called on the congressional leaders to hold a hearing on H.R. 3182, which would require certain federal agencies to carry out a study relating to accounting standards and for other purposes.
“This would be much-needed discussion, bringing better understanding of the impact on all consumers and the opportunity for potential action before the standards go into effect,” they wrote. “… Considering the feedback received from smaller, community-based depositories regarding CECL, we hope those will provide further incentive for the Committee to ask FASB to provide what their analytics determined will be the impact on those community-based lenders, including credit unions.”