ARLINGTON, Va.—NAFCU has sent a letter to the Financial Accounting Standards Board urging it to reconsider its current expected credit loss standard.
In the letter, NAFCU President and CEO Dan Berger wrote: "NAFCU and our members believe the FASB should redeliberate the effective dates established by the board last year and further prolong implementation in order to provide credit unions with the requisite time to adequately prepare for the credit losses standard. Specifically, NAFCU recommends the FASB approve a one-year deferral on top of the board’s presently-adopted effective dates. "
Berger emphasized the need for any proposed update to consider the unique structure of credit unions as member-owned, not-for-profit institutions. He also noted, "NAFCU strongly believes that credit unions should not be subject to the proposed ASU as the benefits are clearly outweighed by the burdens of adopting such a standard."
NAFCU’s letter follows last’s week’s letter to FASB on the same matter from 62 Congressional lawmakers. That letter shared concerns about how FASB’s proposal could hurt credit unions and community banks, stating the credit loss standard would “comprehensively revise the way all lenders set aside reserved funds in anticipation of possible future credit losses. FASB must proceed with the utmost caution in finalizing the (accounting standards update) as it has the potential to irreversibly damage community banks’ and credit unions’ ability to continue to adequately serve their customers/members and communities and sustain the economic recovery.