Standards board rejects CECL proposal
The Financial Accounting Standards Board (FASB) rejected yesterday a proposal brought by several financial institutions and trade associations, including AFSA. The proposal would have softened the impact of a change that will force banks to book losses much faster.
The Wall Street Journal reported that the rejection means the accounting change – known as CECL, for current expected credit losses – will go forward as planned at the start of 2020 for publicly traded U.S. banks. CECL will require banks to record all expected future losses on their loans as soon as they are issued. That will force some banks to boost their loan-loss reserves, cutting into earnings and regulatory capital.
AFSA will continue to work with Congress on CECL.
April 3rd, 2019
