Removing Barriers Blog

CUNA Requests Action on FASB’s Credit Impairment Proposal
Posted March 09,2016 by CUNA Advocacy

As we’ve reported, FASB is in the final stages of reviewing a proposed standard that would drastically change the accounting method for assessing credit impairment. The proposal, which is expected to be finalized by June, would require a forward-looking “current expected credit loss”—or CECL—model instead of the current “incurred loss” approach.

While CUNA has conveyed concerns with the proposal to FASB through several letters and in-person meetings, FASB is a non-governmental body and can be more difficult to persuade than governmental agencies. Therefore, we are calling on credit unions to share their concerns directly with FASB. To facilitate your input, we have activated our Voter Voice Grassroots Action Center. To make it easy to send comments to FASB Chairman Russell Golden, the Action Center includes a draft letter that can be modified or sent as is.

This is an important issue for all credit unions. Not only will the proposed standard present compliance challenges for all credit unions, it will also likely require an immediate increase to credit unions’ loan loss reserves. We appreciate your participation to try to improve this proposal.