AFSA, Trades Seek CECL Parity
Today the American Financial Services Association, along with other financial services associations, sent a letter to Securities and Exchange Commission Chairman Jay Clayton, requesting that he apply a current expected credit loss (CECL) final implementation date uniformly for both bank and non-bank financial institutions. This is needed to create parity in reporting obligations for financial companies and to allow them to devote their full attention to meeting consumer and business needs in the wake of COVID-19.
Congress gave an exemption to banks and bank holding companies in the recently passed CARES Act to provide relief during the pandemic. However, non-bank financial companies not affiliated with a bank or bank holding company do not have the option to delay reporting.
The joint letter noted that similar to depositories, non-banks serve a wide range of borrowing needs, including among many others, small business, consumer and personal loans and credit cards, auto finance, residential and commercial mortgage lending. Particularly now, when the country is facing a pandemic and ongoing economic disruptions, access to lines of credit and liquidity are most needed.
In addition to AFSA, the other trades signing the letter were the American Council of Life Insurers, the Marketplace Lenders Association, the Mortgage Bankers Association, and the Structured Finance Association.
March 31st, 2020
