ABA Recommends Focus for Congressionally Mandated CECL Study

As the deadline for an ABA-advocated, congressionally mandated Treasury Department study of the current expected credit loss standard looms, the American Bankers Association recently wrote to Treasury to provide its view on which aspects of CECL the study must address.

Specifically, ABA called on Treasury to examine the effects of CECL on lending to key constituencies, including low-to-moderate-income borrowers and small-business owners; to address coronavirus-related forecasting without ignoring a typical economic cycle; and to focus on the reliability of forecasting, including collateral values.

“Over time, CECL will have vast impacts to borrowers and banks regulated by the federal agencies,” ABA added. “As the CECL study progresses, the administration should recognize that legislative inquiries and actions to provide an option to delay CECL are borne from real concerns.”