Removing Barriers Blog

CUNA Stresses Credit Union Difference in Meeting with FASB Chair
Posted May 18, 2016 by mcarew

Today, our staff met with Financial Accounting Standards Board (FASB) Chair Russell Golden to highlight credit union concerns. We used the opportunity to discuss several issues, including FASB’s recently finalized credit impairment standard. In particular, we stated the importance of FASB’s Transition Resource Group that was developed to assist with the implementation of the impairment standard. Credit unions are represented on the Group by two CUNA members, Susan Hannigan, CFO at Jeanne D’Arc CU in Lowell, MA, and Doug Wright, CFO at Mission FCU in San Diego. The Resource Group will be helpful in filtering questions and issues to FASB as they arise as credit unions and other entities begin to comply with the standard, which goes into effect in 2021 for credit unions.

As we reported, in addition to a delayed effective date, FASB made several other positive changes to the impairment standard since it was initially proposed three and a half years ago. In particular, FASB announced changes that will provide additional flexibility, stating that there is no one methodology that entities must use. This is a major improvement that we specifically advocated for in a March letter to Golden. During today’s meeting, we requested additional guidance for credit unions, and were glad to hear Golden say that FASB plans to put out such guidance around the same time the final standard is issued, which we expect to occur sometime next month.

Also at the meeting, were Financial Accounting Foundation (FAF) Trustee, John Dugan, and Governmental Accounting Standards Board Technical Director, David Bean. Throughout the meeting, our staff emphasized the credit union difference and urged FASB to recognize the uniqueness of credit unions in each standard it promulgates. Accounting standards intended for large, publicly-traded banks are often inappropriate when applied to credit unions.

Today’s meeting follows an FAF dinner that we attended, at which Rick Ketchum, Chairman & CEO of the Financial Industry Regulatory Authority (FINRA) discussed the importance of accurate accounting standards.