NCUA Seeks Comments on CECL Implementation

Share your views: CCUA Survey due Oct. 9

The National Credit Union Administration (“NCUA”) is seeking comments on a proposed rule to address changes to the U.S. generally accepted accounting principles (“GAAP”). Specifically, the proposed rule would provide that, for purposes of determining a federally insured credit union’s (“FICU’s”) net worth classification under the prompt corrective action (“PCA”) regulations, the Board will phase in the day-one adverse effects on regulatory capital that may result from the adoption of the current expected credit losses (“CECL”) accounting methodology.

Consistent with regulations issued by the other federal banking agencies, the proposed rule would temporarily mitigate the adverse PCA consequences of the day-one capital adjustments, while requiring that FICUs account for CECL for other purposes, such as Call Reports. The proposed rule would also provide that FICUs with less than $10 million in assets are no longer required to determine their charges for loan losses in accordance with GAAP. The Board's regulations would provide that these FICUs may instead use any reasonable reserve methodology (incurred loss), provided that it adequately covers known and probable loan losses.

The Cooperative Credit Union Association plans to file a comment letter with the NCUA and seeks member views on CECL implementation and the NCUA’s proposed mitigation approach to inform our response. As such, the Association seeks member input in the form of a brief survey, available HERE. Your survey response is requested no later than Friday, October 9.

The full NCUA proposal can be found HERE.

Please send any questions or comments to