On June 16, 2016 the Financial Accounting Standards Board (FASB) released its long-awaited Current Expected Credit Loss (CECL) model. The final version of CECL is more workable as a result of the consistent advocacy efforts of community banks. While these advocacy efforts began a number of years ago it was not until very recently that FASB responded to our concerns and many important concessions were achieved. Read About CBAI’s Recent Advocacy Efforts.
On the heels of the release of FASB’s CECL model the banking regulators published their Joint Statement on the New Standard on Financial Instruments – Credit Losses. In this seven page document CBAI identified 12 separate statements that are clear concessions or accommodations to community banks – actually very transparent nods to our aggressive advocacy on this important matter.
We are encouraged to read in this Statement, “The agencies support an implementation of the FASB’s new accounting standard that is both reasonable and practical, taking into consideration the size, complexity, and risk profile of each institution.” This enlightened regulatory position was the result of the diligent efforts of community banker, the Independent Community Bankers o America (ICBA), and CBAI. The Agencies' statement also contains steps to take now to assure a successful transition to the new accounting standard. Read the Joint Statement.
ICBA has posted answers to frequently asked questions on the new accounting standard. The FAQs cover key changes to allowances for credit losses, measurement requirements for loss protection, effective dates and more. Read ICBA’s FAQs.
June 17, 2016