The Financial Accounting Standards Board recently made important, ICBSD supported revisions to its proposed accounting update.
The revised Current Expected Credit Loss (CECL) proposal is more flexible and scalable for community banks, which will allow them to continue using their personal understanding of their local markets, instead of complex modeling systems to determine their loan-loss reserves. By allowing community banks to evaluate and adjust their loan-loss amounts using qualitative factors, historical losses, and current systems (such as spreadsheets and narratives), FASB has made important changes to its proposed accounting standard.
"The ICBSD and our member community banks are very pleased to see changes being made," said Greg D. McCurry, ICBSD President & CEO. "These changes will significantly reduce the burden on community banks in South Dakota and across our nation."
"FASB has clearly listened to the concerns of ICBA and the nation's community banks," said Timothy Zimmerman, ICBA Vice Chairman. "The revised standard includes important changes that address concerns with the irreversible damage the CECL model would have had on community bank lending to local consumers."