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Banks Clash over FASB’s Credit Losses Proposal

Supporters of a proposal to change a key part of the Financial Accounting Standards Board’s (“FASB”) credit losses standard attempted to make progress at the board’s recent public roundtable. Held at the FASB’s headquarters, the roundtable served as an opportunity to strengthen banker support for the proposed change on Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Despite the efforts, however, the roundtable discussion exposed the divide among bankers concerning whether and how the FASB should amend its standard. Representatives from mid-sized banks called for tweaks to ASU No.. Read More.

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Bank Regulators Propose Phase-in Implementation of Credit Loss Standard

As banks, industry groups, and others continue to raise concerns over Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, three bank regulators have a plan to reduce the capital effects of the Financial Accounting Standards Board’s credit loss standard. The Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation have proposed a phased-in implementation of the current expected credit loss model. Over a three-year period, banks could phase in the standard’s adverse effects on regulatory capital when they implement the new accounting guidance. This phase. Read More.

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Credit Loss Standard Update Could Benefit Subprime Auto Lenders

To help lenders that provide auto loans to customers with little to no credit, the Financial Accounting Standards Board (“FASB”) will issue a proposed amendment to the transition guidance for Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Scheduled for release next year, the proposal would allow subprime auto lenders and other businesses to measure financial instruments, which were previously recorded at amortized cost, at fair value when they apply the credit loss standard beginning in 2020. Existing auto loans would be calculated similarly to loans distributed after the. Read More.

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Lawmakers and Bank Representatives Discuss FASB Credit Loss Standard

The Financial Accounting Standards Board’s (“FASB”) credit loss standard was a key focus at the American Institute of Certified Public Accountants’ National Conference on Banks and Savings Institutions in Maryland last week. Lawmakers and representatives from the banking industry met with Securities and Exchange Commission (“SEC”) chief accountant Wesley Bricker and FASB member Harold Schroeder to share their concerns regarding the guidance under Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. During a session in Rep. Blaine Luetkemeyer’s office, several regional bank representatives urged Bricker and Schroeder to amend. Read More.

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AICPA and Credit Union Advocate Seek New Credit Loss Standard Effective Date

Despite non-public entities already receiving an extra year to comply with the Financial Accounting Standards Board’s (“FASB”) new credit loss standard, the American Institute of Certified Public Accountants (“AICPA”) and the Credit Union National Association (“CUNA”) seek another extension. Both organizations want the FASB to amend the effective date of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as well as give privately held banks and credit unions until January 1, 2022, to implement the guidance. Non-public businesses like private community banks and credit unions must apply the new. Read More.

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Banks Urged to Prepare for FASB Credit Loss Standard

Banking institutions are advised to act fast on implementation plans for Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326). At the AICPA National Conference on Banks and Savings Institutions last week, Louis Thompson of the Office of the Comptroller of the Currency told depository institutions to start preparing for the Financial Accounting Standards Board’s (“FASB”) current expected credit loss (“CECL”) standard. Thompson emphasized that due to the substantial changes in writing down bad loans and securities, implementation efforts should require full commitment and cooperation to ensure the new guidance is applied in a disciplined and. Read More.

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