FASB has clearly listened to the concerns of ICBA and the nation’s community banks.
Washington, D.C. (PRWEB) April 01, 2016
Independent Community Bankers of America® (ICBA) Vice Chairman Timothy K. Zimmerman today told the Financial Accounting Standards Board that it has made important ICBA-advocated revisions to its proposed accounting update. Representing the nation’s community banks at today’s FASB Transition Resource Group meeting on the Current Expected Credit Loss model, Zimmerman called on FASB to communicate and work with the federal banking agencies and auditors on these changes to ensure they are implemented.
“FASB has clearly listened to the concerns of ICBA and the nation’s community banks,” Zimmerman said. “The revised standard includes important changes that address concerns with the irreversible damage the CECL model would have had on community bank lending to local consumers. We also need to ensure the regulators and auditors who will implement the standard recognize the significant changes FASB has made.”
The revised CECL proposal is more flexible and scalable for community banks, which will allow them to continue using their personal understanding of their local markets—instead of complex modeling systems—to determine their loan-loss reserves. By allowing community banks to evaluate and adjust their loan-loss amounts using qualitative factors, historical losses, and current systems, such as spreadsheets and narratives, FASB has made important changes to its proposed accounting standard.
ICBA, its affiliated state associations, and community bankers have worked to address problems with FASB’s CECL proposal since it was introduced in 2011, including delivering a petition to FASB with nearly 5,000 signatures. Most recently, a coalition of ICBA community bankers met with FASB at a Feb. 4 roundtable to continue the industry’s campaign for an alternative accounting plan that allows loan-loss provisions to be based on historical losses and other factors they deem relevant based upon their knowledge of the local marketplace.
ICBA appreciates that FASB heard the voice of community bankers, as evidenced by the revisions. The association looks forward to ensuring that the intent of the standard to allow flexibility and scalability is maintained throughout the implementation of the standard.
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.
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