A meeting of the full board and only the full board to hear directly from community bankers is now crucial for board members to fully comprehend the failure of CECL as it is currently proposed.
Washington, DC (PRWEB) January 07, 2016
The Independent Community Bankers of America® (ICBA) called on the full Financial Accounting Standards Board (FASB) to meet directly with community bankers on the adverse impact of FASB’s proposed Current Expected Credit Loss (CECL) model. In a letter to FASB Chairman Russell G. Golden, ICBA President and CEO Camden R. Fine wrote that the board should also pause the standard-setting process until community bank concerns have been fully explored and remedied.
“A meeting of the full board and only the full board to hear directly from community bankers is now crucial for board members to fully comprehend the failure of CECL as it is currently proposed,” Fine wrote ahead of a FASB roundtable that follows erroneous remarks by Golden that inaccurately implicated Main Street community banks in the Wall Street financial crisis. “ICBA urges you to schedule such a meeting as soon as possible.”
FASB’s CECL model would force community banks to record a provision for credit losses the moment they make a loan and would cause a projected 30 to 50 percent hike in loan-loss reserves, resulting in a dramatic negative impact on local consumers. Fine wrote that FASB continues to exhibit a misunderstanding of how community banks manage customer relationships and originate loans in their communities. The proposed accounting standards contradict these institutions’ localized business model by requiring complex modeling that treats loans as standardized financial products, he wrote.
ICBA continues to advocate its alternative plan for institutions with less than $10 billion in assets, which bases loan-loss provisions on historical losses for similar assets. Meanwhile, ICBA and the nation’s community bankers will continue urging FASB to reassess its proposal, which would inflict permanent damage on the economy and forever change the landscape of community bank lending to the detriment of Main Street communities.
The Independent Community Bankers of America®, the nation’s voice for more than 6,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit http://www.icba.org.