ABA Endorses Two CECL Software Solutions

The American Bankers Association today announced its endorsement of two software solutions to help banks meet the upcoming deadline for Current Expected Credit Loss implementation. Sageworks ALLL and MST Loan Loss Analyzer are software solutions that provide modeling and data management for CECL accounting.

CECL represents the biggest accounting change in banking history. The new standard requires banks to record credit losses at loan origination based on a “life of loan loss” expectation. Under CECL, banks will need new processes for collecting and storing loan level data, forecasting future economic conditions and incorporating those forecasts into the CECL estimate.

Sageworks ALLL helps bankers streamline the reserve calculation process under current GAAP, as well as future GAAP with current expected credit losses. The MST LLA is a reliable, repeatable process for determining and documenting a financial institution’s allowance under the current incurred loss standard and CECL. Both systems, said Mike Gullette, senior vice president of accounting and tax at ABA, “are built to provide the flexibility banks will need in reacting to constantly changing expectations that are sure to come from regulators and auditors in the future.”