FASB has set the implementation timeline for calculating the ALLL using the current expected credit losses model (CECL). Discover 5 things your bank or credit union can do now to prepare for implementation
1. 5 Things to Do Now for CECL
Prep for a Smooth
Implementation
2. 1.LEARN.
• Read FASB’s CECL Accounting Standards
Update
• Read FASB Comment Letters
• Review Analysis from ABA
• Review Analysis from Your Bank Auditor
• Listen to Federal Reserve Calls on CECL
3. Develop your own
tactical approach to
CECL.
You won’t be able to
simply copy what
another bank is doing.
5. Get everyone on the
same page.
Avoid committing
time and expense to
a model that proves
ineffective.
6. 3.HOARD.
• Data
• Loan Balance Data
• Segmentation Information
• Risk Information
• Loan Origination Information
• Transaction Level Data
• Defaults and Pre-Payments
11. Do not book losses
according to CECL
before the CECL
implementation
date.
12. “This is not a tweak for
any bank.”
-Steven Merriett
Chie f Acco unt a nt , Fe de ra l
Re s e rve Sys t e m, fro m 9/ 2015
AICPA Na t io na l Co nfe re nce o n
B a nks & Savings Ins t it ut io ns
13. So ft wa re So lut io ns fo r
St re a mlining t he ALLL a nd
Pre pa ring fo r CE CL
Learn More About MST
For the full blog,
click here.
14. About MST
Since 2005, MST has implemented technology solutions to help financial
institutions simultaneously simplify and sophisticate the way they manage the
inherent risk in their loan portfolios. MST is the leader and pioneer in ALLL
software solutions and education for financial institutions across the U.S. and
committed to its leadership role in developing and refining products that
address ALLL compliance requirements as they evolve, including the new CECL
standard. Our solutions are bank-defined, integrate with core systems, deliver
greater adherence to policy, and exponentially improve efficiencies - all of
which positively impact profitability.
www.mainstreet-tech.com