WASHINGTON, D.C. —Today, Ranking Member of the Subcommittee on National Security, International Development, and Monetary Policy, Congressmen French Hill (AR-02), released a statement in support of the Financial Accounting Standards Board’s (FASB) unanimous decision to delay implementation of its Current Expected Credit Losses (CECL) accounting standard until 2023 for most financial institutions.

Current Expected Credit Losses (CECL) replaces the existing incurred loss methodology for certain financial assets. The new accounting standard will apply to most banks, savings associations, credit unions and financial institution holding companies, regardless of size, that file reports which conform to U.S. generally accepted accounting principles (GAAP).

“Small and medium sized financial institutions are still bearing the brunt of Dodd-Frank Act even though they did not cause or contribute to the 2008 crisis,” said Congressman Hill. “The CECL accounting standard is a prime example of the Washington-knows-best, one-size-fits-all mentality that does not benefit the nation’s banks and ultimately hurts the customers they serve. I’ve spoken with leaders from Arkansas's community banks and credit unions who tell me they simply don’t have the systems and the management capacity to implement CECL the way it is current written. I support the decision to delay implementation of CECL and urge FASB and prudential regulators to carefully complete studies ensuring such a proposal can be implemented without costs that far exceed benefits.”


Background:

Congressman Hill joined with a bipartisan group of ten Congressional lawmakers to introduce H.R. 3182, the CECL Consumer Impact and Study Bill of 2019. This bipartisan bill aims to delay the implementation of CECL while cost-benefit studies are done to explain the impact on financial institutions.