CECL Part 2: Creating a Compliance Team

By Preston Packer |

Aug

02

There’s a lot that goes into CECL compliance (read CECL Part 1: Four Steps to Becoming Compliant), which means that formulating an effective compliance strategy will take more require more than just a couple hours of your time. To get on board with CECL compliance, everyone must be aware of changes that need to be made, and how they might affect their work. This will begin by creating a CECL compliance team with members from different functional areas in your credit union.

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CECL Part 1: Four Steps to Becoming Compliant

By Preston Packer |

Jul

25

After the financial blowout and market crash of 2007, several new policies have come about to keep financial institutions more accountable. One of those policies is Current Expected Credit Loss, or CECL. Previously, FI's typically accounted actual loss and defaults as a projection for future losses, but with CECL, they are expected to use robust data sets to more accurately project future losses. Therefore, FI's must set aside capital to ensure any future losses would be protected, even if they haven’t occurred, or are not expected to for some time. This may seem like an inconsequential change, however, for many banks and credit unions, it may require them to put more capital than they have in years past. The deadline to be CECL compliant is fast approaching, as the Securities and Exchange Commission (SEC) expects policies and finances in place by 2021 for credit unions. If you’re CU is starting to feel the pressure of CECL requirements, here is how you can begin the process of becoming fully compliant. Read More
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