Continuing its work to address the community bank impact of the Financial Accounting Standards Board’s Current Expected Credit Loss standard, ICBA expressed support for new legislation that would require regulators to study CECL’s impact and delay its effective date by one year.
Introduced by Sen. Thom Tillis (R-N.C.), S. 1564 requires the study to assess CECL’s impact on consumer and small-business credit availability, smaller institutions, regulatory capital during an economic recession, systemic risk, and other parameters. The report would also include recommendations for changes to CECL to eliminate or mitigate any negative effects identified in the report.
In a letter to Tillis, ICBA noted that it has worked with FASB officials since 2011 to achieve several substantive improvements to CECL. ICBA will continue to advocate for community banks and press for a more flexible CECL environment.
A new interactive timeline on ICBA’s website details the years-long initiative to make CECL more workable and scalable for community banks.