In a comment letter to the Financial Accounting Standards Board today, the American Bankers Association offered support for a proposal that would allow non-public business entities to implement CECL on Jan. 1, 2022 (non-PBEs are currently required to implement the standard by Dec. 31, 2021). ABA had previously identified challenges with the current effective date for non-PBEs in a recent white paper and welcomed the proposed extension, noting that the change in the implementation date for non-PBEs will effectively afford the qualifying entities an additional year to implement CECL, consistent with the original intent of the board.
While ABA fully supported the proposal, this type of correction indicates that the CECL standard was issued without sufficient due diligence, and that CECL will have far-reaching implications for banks and consumers that were either unintended or not sufficiently understood when the standard was issued. ABA called on FASB to undertake and share a cost-benefit analysis of the CECL standard to address some of the confusion surrounding the cost and overall effect the standard will have on the industry.
