As the Financial Accounting Standards Board prepares to vote this week on a delay of its current expected credit loss accounting standard for some—but not all—banks, Reps. Vicente Gonzalez (D-Texas) and Ted Budd (R-N.C.) today called on FASB to consider extending the delay to all companies and to immediately begin a quantitative impact study of CECL.
“At this point, every segment of the market—lending institutions, bank investors and consumer advocates—sees the danger ahead and the need to slow down,” Gonzalez and Budd wrote, citing a Friday statement from the Center for Responsible Lending warning about potential CECL effects on low-income families and minority communities. In June, Gonzalez and Budd introduced H.R. 3182, a bipartisan bill calling for a halt to CECL implementation until a quantitative impact study can be completed.
ABA SVP Mike Gullette and VP Josh Stein discussed the risks of delaying CECL for some banks but not others, including distortionary competitive effects and auditor readiness, on a recent episode of the ABA Banking Journal Podcast. They also discussed ABA’s advocacy for a CECL delay for all banks pending a quantitative impact study.