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Congressman Vicente Gonzalez

Representing the 15th District of Texas

Congressman Gonzalez Leads Bipartisan Effort to Delay Implementation of Current Expected Credit Loss (CECL) Methodology Citing Concerns

June 11, 2019
Press Release

Today, Congressman Vicente Gonzalez (TX-15) introduced H.R. 3182, a bipartisan bill to delay the implementation of CECL while cost-benefit studies are done to explain the impact on certain kinds of business. Congressmen David Scott (GA-13), Brad Sherman (CA-30), Josh Gottheimer (NJ-05), Henry Cuellar (TX-28), Blaine Luetkemeyer (MO-03), Barry Loudermilk (GA-11), Roger Williams (TX-25), Ted Budd (NC-13) and French Hill (AR-02) make up the bipartisan team of original co-sponsors. 

The Financial Accounting Standards Board (FASB) update to the accounting standards for credit losses that included the CECL methodology is set to go into effect shortly. The standard replaces the existing incurred loss methodology for certain financial assets.  The new accounting standard will apply to all 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).

“CECL affects a very broad part of our business sector who engage in lending, big and small,” Congressman Gonzalez said. “But those effects are not known and they too could be big or small. My concern is that we have paid too much attention to the largest entities and not enough to the smallest, where a $10,000 compliance bill just to learn whether you do or do not need to change your business plan, is just too much for some to absorb.”

“With the potential to drastically impact consumers across the nation, it is simply unacceptable to continue the implementation of CECL without understanding the broad economic implications,” said Congressman Blaine Luetkemeyer, Ranking Member of the Subcommittee on Consumer Protection and Financial Institutions. “It has become abundantly clear that no comprehensive analysis was done to see how the most significant accounting change in decades would affect our economy. In response to the growing groundswell of concern surrounding CECL, I’m proud to join my bipartisan colleagues on this commonsense legislation.”

“I never knew when I took office that the implementation of accounting standards would prove to be such an important issue, yet I’ve been pleased to see it provide so many opportunities for working across the aisle in this hyper-partisan era. The Financial Accounting Standards Board, or FASB, is moving forward with an accounting standard affecting generally every financial institution in the country and the customers they serve, without a proper study of its broader economic impact,” said Congressman Ted Budd. “To me, this is yet another example of an unaccountable bureaucracy not taking the appropriate steps to ensure that it is helping instead of hurting folks. I am particularly concerned about how this new accounting standard will impact lending in economic recessions and affect access to capital for the consumer in financial downturns. It is now up to us in Congress to make FASB complete this common sense task and that’s what our bipartisan bill would do if enacted.”

The business community and financial services industry have long called for a delay and study so lawmakers and regulators can more effectively evaluate the effect of this new accounting standard on financial institutions.

“We applaud Rep. Gonzalez and Rep. Budd for introducing the bipartisan CECL Consumer Impact and Study Bill of 2019, which would require FASB to delay the implementation of CECL until a rigorous, quantitative impact study can be completed,” said Rob Nichols, President and CEO of the American Bankers Association. ”Such a study is the only way regulators can properly assess the effect this new accounting standard will have on financial institutions, their customers and the broader economy, and this commonsense legislation would make that happen.”

“We thank Rep. Gonzalez for recognizing the need to delay CECL implementation so we may better understand the possible consequences not only for banks, but for the people and communities they serve,” said Chris Furlow, Texas Banking Association President and CEO.  “Community banks work every day to meet the financial needs of Texas families and small businesses, and we are concerned that CECL may impede their ability to do so, particularly in the event of an economic downturn.”

"On behalf of 400 credit unions in Texas, we applaud Rep. Gonzalez for introducing bipartisan legislation to stop and study the impact of CECL rules as proposed by FASB,” said Jeff Huffman, Executive Director of the Texas Credit Union Association. “The Texas Credit Union Association is concerned these proposed rules will hurt credit unions ability to fully serve their members and could curtail lending to consumers of modest means.  A thorough review of the impact of these one-size-fits-all rules on community financial institutions is essential to protect consumers access to credit.”

The Financial Services Committee held a hearing entitled “Assessing the Impact of FASB’s Current Expected Credit Loss (CECL) Accounting Standard on Financial Institutions and the Economy” on December 11, 2018.  The members explored some of their concerns with the witnesses, and this bill was developed in part after hearing testimony from this panel of experts.

For more information on H.R. 3182 and full bill text, visit