Update on August 12, 2021
In June the NCUA passed a rule reducing the day-one effect of CECL on PCA. This blog details the effects of the new rule, and provides a spreadsheet for calculating the effect of the rule on your credit union.
On this page you will find resources related to CECL, the Current Expected Credit Losses rule created by FASB to promote more accurate provision for loan and lease losses. There are many sites on the Internet with CECL resources, and lots of educational webinars. This page provides resources developed specifically for small credit unions that wish to implement their own CECL solution.
NCUA has indicated that smaller, less complex credit unions should be able to perform their own CECL calculations (that is, they won’t have to pay a vendor for the service), and that their method for doing so can be less complex than a larger credit union with more varied and complicated products and services.
The Association attended numerous webinars, read many white papers, and reverse engineered three methodologies for meeting the requirements of CECL. To help you learn the process, we’ve developed a number of resources:
While it will likely take some work for a credit union to get this system set up, we believe that it’s completely doable by a credit union that can get the right data, and has the patience and spreadsheet know-how. Once the system and spreadsheets are set up, it should take relatively minimal effort on an ongoing basis.
If you have questions or need assistance with any of the resources below, contact Stephen Nelson at the Association at 801-243-3118.
Note that these resources are provided free of charge, and you are welcome to use them as you see fit, as long as you do not charge for any of the resources. That is, please do not re-distribute or re-purpose them for any kind of fee or profit.