Current Expected Credit Loss (CECL) for Community Banks and Credit Unions
The new FASB Accounting Standard Update means your financial institution must start looking forward when estimating credit loss in loan portfolios. The marketplace is flooded with information regarding the new standard.
Chances are, you’ve read, heard, and accumulated CECL advice and information including:
- Guidance from your regulators
- Participation in summarized CECL seminars/webinars
- Discussion with third-party vendors that may have:
- Suggested or demonstrated their methods and proprietary model solutions without knowledge of your portfolio, data, human resources or budgets
- Suggested you begin gathering all the data necessary to run their model
It can be a daunting task to get your hands around all the information that is available. Rest assured — CECL implementation doesn’t have to be that hard.
FASB and regulators have committed to giving community Banks and Credit Unions broad leeway to adopt simplified implementation using simpler models that leverage existing allowance methodologies.