FASB Agrees to Delay CECL Implementation Until 2023

After months of MCUL and CUNA advocating for a delay of the current expected credit loss (CECL) implementation, the Financial Accounting Standard Board (FASB) agreed this week to put it off until January 2023 instead of the previously scheduled January 2022.

FASB’s decision changes the effective date structure for CECL — a new accounting standard that uses an expected loss measurement for the recognition of credit losses — to account for two groups with different effective dates, instead of the current structure with three groups: Securities and Exchange Commission (SEC) filers; public business entities that are not SEC filers; and non-public business entities. Credit unions fall under the non-public business entity category.

“While a formal Board vote is still to come, based on unanimous support of the standard at today’s meeting we expect a final standard to become official in the coming weeks,” said CUNA Deputy Chief Advocacy Officer Elizabeth Eurgubian. “However, CUNA’s longstanding position has been and continues to be that application of CECL to credit unions is inappropriate, and that implementation of the new standard will create compliance challenges, as well as alter the financial standing of credit unions.”

“While this is just a delay, it does buy us some more time to seek a more permanent solution,” said MCUL President/CEO Dave Adams. “We want to thank all of our member credit unions that provided comments in support of the delay, as well as the advocacy leadership CUNA has provided on this initiative. We will use this delay to continue to work with the FASB to address our concerns with CECL, and make sure credit unions have the proper guidance prior to its implementation.”