CECL – EXPERIENCES FROM IMPLEMENTATION FOR SMALLER BANKS AND CREDIT UNIONS
CECL IMPLEMENTATION AND ASSOCIATED CHALLENGES Implementing a new system and processes is never an easy task at any financial institution. to avoid disruption to ‘business as usual’, a rigorous approach must be taken. While this is true in all cases, CECL being implemented across the full spectrum of smaller ‘community’ banks and credit unions creates […]
CECL DATA SOURCES OVERVIEW FOR SMALL BANKS – FFIEC, FRED, AND FED
CECL STANDARD AND THE BANKING INDUSTRY Small community banks have until 2023 to implement Current Expected Credit Losses (CECL) accounting standards after the Financial Accounting Standards Board (FASB) decided to delay CECL implementation for private and small public companies in 2019. CECL implementation began for large Security and Exchange Commission (SEC) filers in January 2020. […]
THE IMPACT OF CECL AND REVISED DATES PROPOSED BY THE FASB FOR SMALL BANKS TO IMPLEMENT IT
THE FINANCIAL CRISIS AND BIRTH OF CECL The 2007-2008 financial crisis triggered a cascade of credit losses for banks. It showed just how inadequate the longstanding method of Allowance for Loan and Lease Losses (ALLL) was for the adjustment of reserve levels of financial institutions. Taking note, on June 16, 2016, the Financial Accounting Standards Board (FASB) formulated Current Expected Credit Loss (CECL) to replace the ALLL standard. The CECL standard brought along with […]
CECL SOLUTIONS FOR SMALLER BANKS AND CREDIT UNIONS
SCALE IS NOT THE ANSWER OR IS SCALE THE ANSWER? Is applying SCALE to the CECL problem the right thing to do for small banks and credit unions? CECL allows banks significant flexibility for their choice of method(s) for estimating potential credit losses for capital provisioning. Banks can apply different ‘Expected Credit Loss’ (ECL) methods […]
