CECL delay to 2024 and Reg D Transfer Limit changes would help CUs focus on COVID-19 needs Posted by AVCU on 8:27 AM

CECL delay to 2024 would help CUs focus on COVID-19 needs

The Financial Accounting Standards Board (FASB) should delay implementation of the current expected credit loss (CECL) standard to at least January 2024, CUNA wrote to FASB Wednesday, as credit unions are currently focusing on serving members affected by the coronavirus (COVID-19) pandemic. CECL, a new accounting standard that recognizes lifetime expected credit losses as opposed to the current “incurred-loss” approach, is currently scheduled to become effective for credit unions starting in January 2023.

“At this time, it is critical that credit unions be able to focus on serving their members, who are facing mounting financial pressures due to COVID-19. Therefore, we urge the FASB to begin the process to delay the effective date of the CECL standard as it applies to credit unions until at least January 2024,” the letter reads.

“In light of the current crisis, we urge the FASB to provide additional time for compliance. While some credit unions are in the final stages of preparation, the vast majority are in the very early stages of gathering necessary data and beginning to make the numerous changes required under CECL. A one-year delay will help ensure our nation’s credit unions—the median of which is well under $50 million in assets—are prepared to comply,” it adds.

CUNA also suggested the delay in CECL implementation in a letter sent this week to the administration outlining ways regulators and Congress could help credit unions better serve members in this time of need.

Reg D transfer limit should be temporarily or permanently eliminated

The Federal Reserve Board should eliminate, either temporarily or permanently, the Regulation D transfer limit, CUNA wrote to the Fed Tuesday, due to the unprecedented challenges caused by the coronavirus (COVID-19).

“CUNA is confident that our members will be able to deliver necessary financial services to credit union members throughout the pandemic. The Board has taken several steps since the start of crisis to boost the economy and to ensure that the system has adequate liquidity, but most of these efforts do not provide help for individual challenges facing consumers,” the letter reads. “Providing relief from the Regulation D transfer limit would make it easier for credit unions to give members access to their funds.”

Regulation D limits on the number of transfers or withdrawals consumers—including credit union members—can make from their savings accounts to six per month. CUNA has previously called for the Fed to permanently raise the transfer limit.

“As credit unions and other financial institutions take steps to protect employees and consumers’ health through the delivery of financial services by electronic means, Regulation D becomes an even larger barrier to the smooth and seamless delivery of financial services,” the letter reads. “With federal, state and local governments urging Americans to stay home and limit contact with others, making transfers by phone or through mobile banking applications is the safest way to access funds and yet these methods count against the transfer limit. Penalizing Americans being asked to stay home for conducting banking transactions in the safest manner is poor public policy and should be changed immediately.

“We believe such threshold is arbitrary, antiquated, unnecessary and now possibly a barrier to consumers accessing their funds from home. We urge the Board to make a change soon to make it easier for Americans to access their funds,” it adds.