Approximately two-thirds of financial institutions have in some way begun tackling the Financial Accounting Standards Board’s Current Expected Credit Loss model for loan loss accounting, according to a survey released today by financial information firm Sageworks. About 54 percent of respondents have read through the standard, 64 percent have discussed it within their institutions and 27 percent have shared CECL details with their boards.
However, 23 percent of respondents at banks and credit unions said they had not taken any action yet, and 11 percent said they were unsure about where to start. While CECL takes effect in 2020 for Securities and Exchange Commission registrants and 2021 for all other banks, ABA is encouraging bankers to begin planning now for the transition and educating their investors, management and board about CECL.
