ARLINGTON, Va.—NAFCU has strongly urged the Financial Standards Accounting Board to issue an updated exposure draft for public comment before it finalizes its credit losses standard.
“We write to stress our belief that the issuance of an updated exposure draft for public comment is necessary and important,” stated NAFCU’s regulatory and legislative committees in a letter to FASB. “The additional comment period would not only benefit the nation’s credit unions but also provide all stakeholders, large and small, with a crucial opportunity to communicate their views about an accounting standard that will necessitate the expenditure of considerable resources.”
NAFCU’s regulatory and legislative committees are working groups made up of more than 50 credit union professionals. The letter reiterates NAFCU’s view that because credit unions are member-owned, not-for-profit cooperatives without investors, they should be exempt entirely from the credit losses standard.
However, NAFCU’s committee members note, “at a minimum, the confusion and lack of transparency surrounding the development of the current expected credit loss (CECL) model necessitates the solicitation of additional industry feedback prior to finalization.”
The letter also pointed to the Administrative Procedure Act, which requires federal agencies to engage in subsequent comment periods if changes are made to a rule that make it no longer a logical outgrowth of the initial proposal. While FASB is a private, nonprofit organization and is not subject to the requirements of the APA, the committee members’ letter states that “FASB should voluntarily issue an updated exposure draft for public comment.”