Amid the growing economic fallout from the coronavirus pandemic and public health response, the American Bankers Association and several other financial trade groups urged the Securities and Exchange Commission to use its statutory authority over public company accounting rules to delay implementation of the Current Expected Credit Loss approach.
“Banks have strong capital and liquidity—and over the past decade the regulators have taken multiple actions to strengthen the financial system,” the groups said, noting that CECL “take[s]capital out of the system during a moment when it is most needed. A long-term delay of CECL will allow us to deploy that capital today in support of our customers and the economy.”
While the SEC has designated the Financial Accounting Standards Board as the standard-setter for public company accounting, the groups reminded the SEC of its “plenary authority” under federal securities laws to overturn or delay CECL. FDIC Chairman Jelena McWilliams last week urged FASB to pause CECL implementation in response to the crisis.