In a letter to the Financial Accounting Standards Board yesterday, ABA called for FASB to hold additional meetings and the issuance of a new draft standard to address the complexity of the proposed Current Expected Credit Loss model. The letter followed a Feb. 4 roundtable — hosted by FASB — which ABA said contained “little to no substantial discussion as to how bankers and auditors would address CECL issues in light of current and expected auditing standards and reporting expectations.”
ABA urged FASB to consider making some form of the new draft of the standard available for comment prior to issuing any final rule, pointing out that there is still widespread misunderstanding and disagreement among bankers, auditors and regulators about how CECL can be applied to small banks. The association called for more discussions on the costs and benefits of the standard, its scalability and how it will be implemented, and offered to facilitate those meetings.
ABA further recommended that FASB postpone the rule’s effective date an additional year for non-SEC registrants. The extended timeframe would allow those banks to better learn from the implementation experiences of larger banks before making important operational changes, ABA said. For more information, contact ABA’s Mike Gullette or Donna Fisher.