ALEXANDRIA, Va. (5/31/11)--Credit unions must fully understand the current economic environment and various economic trends before they determine whether, and to what degree, to adjust their allowance for loan and lease losses (ALLL), National Credit Union Administration (NCUA) Chief Economist John Worth said during a webinar held last week. Worth and NCUA staff used the webinar to cover some best ALLL practices for credit unions. The NCUA staffers did not provide any new information regarding the ALLL, but did provide guidance on how credit unions can adjust their ALLL based on different qualitative and environmental (Q&E) factors. NCUA Senior Economist Ralph Monaco and regional problem case officer Elizabeth DiNapoli also took part in the interactive webinar. The NCUA staff mentioned the importance of appropriate historical look-back periods for assessing the ALLL, and recommended that credit unions assess each type of loan individually in order to determine an appropriate historical period for that particular type. The NCUA staff also noted that credit unions may determine that a shorter look-back period is more appropriate for their credit card loans than their auto loans. Staff stated that such a determination is appropriate, as long as it is based on adequate evaluation of the factors affecting the type of loan and the evaluation is documented. CUNA’s Accounting Subcommittee continues to review the NCUA webinar, and will release more information on the webinar and on ALLL in general later this week.