Congressman Gonzalez Reacts to Financial Accounting Standards Board (FASB) Decision to Consider Studying Effects of Current Expected Credit Loss (CECL) Methodology
WASHINGTON – Following the introduction of H.R. 3182, a bill to delay the FASB implementation of the CECL methodology, Congressman Vicente Gonzalez issued the following statement:
“Our financial system craves certainty. It is important that our rules and laws are not constructed in a vacuum or merely react to the changing climate. I am pleased that as a result of our efforts the FASB has begun to change their tune. From small banks to large investment firms, we need to take the adequate time to reassess how this methodology will impact our financial institutions.”
On Monday, Congressman Gonzalez and nine other bipartisan lawmakers filed legislation to request a delay and study of the CECL methodology to properly assess the effect of this new accounting standard on the financial industry.
The Financial Accounting Standards Board update to the accounting standards for credit losses that included the CECL methodology is set to go into effect in the coming months. 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).
For more information on H.R. 3182 and full bill text, visit Congress.gov.