Bankers Anticipate ‘Substantial’ Changes As a Result of CECL

Eighty-three percent of bankers say that implementing FASB’s Current Expected Credit Loss standard will require substantial changes to policies, procedures or technology systems, according to a survey conducted by the American Institute of CPAs. Of those, 20 percent believe CECL will be the biggest accounting change their bank has ever undergone. CECL takes effect in 2020 for Securities and Exchange Commission registrants and 2021 for all others.

The majority of those surveyed — 85 percent — are confident in their existing reserving process to address the transition, and 70 percent say they have either already started preparing for implementation or plan to do so before year-end. Twenty-three percent plan to establish a dedicated CECL team to make the transition, while 50 percent say they will rely on their current account staff to tackle the CECL implementation in addition to their existing roles and responsibilities.

Bankers are most concerned about the overwhelming amount of data they will have to manage as they implement CECL (47 percent), followed by the scrutiny they’ll face from auditors, regulators and investors (27 percent).

As banks prepare to implement CECL, ABA invites bankers to join its CECL peer group. Those interested in sharing questions, concerns, documents and other information related to CECL can sign up now on ABA’s CECL Network.

Organized by bank size, the CECL Network provides members the opportunity to learn from each other through forum discussions, evaluate third-party vendor possibilities and obtain access to CECL-specific resources. Members can expect periodic conference calls, as well as new resource materials and blog posts updated regularly. For more information, contact ABA’s Mike Gullette.