Catalyst Strategic Solutions Offers Credit Unions CECL-Tracking Platform
New FASB accounting standard will change how credit unions estimate loan losses.
Last year, the Financial Accounting Standards Board issued a new accounting standard for estimating loan losses called Current Expected Credit Loss. CECL replaces the former standards for loss accounting, commonly known as FAS-5 and FAS-114. For most credit unions, compliance with the new standard will begin Jan. 1, 2023.
CECL will change how credit unions account for expected credit losses. Instead of calculating bad debt reserve, CECL will require credit unions to calculate bad debt using forward-looking, predictive information. Credit unions will have to evaluate their potential credit losses and make an allowance for the total expected credit losses over the life of their loans.
Catalyst Strategic Solutions, a wholly owned subsidiary of Catalyst Corporate Federal Credit Union, is here to help. The Strategic Link partner’s soon-to-be-released, credit union-based CECLution platform can guide credit unions in planning and implementing their CECL compliance strategies.
The CECLution platform features include:
- An economic-based model that uses Weighted Average Remaining Maturity (WARM) methodology;
- Aggregation and storage of historical data, eliminating the need to extract and forward data with every report;
- Automatic upload of new data to the CECLution platform each time a new quarterly call report is filed;
- Clarity of forecasted loan losses relative to historical loan losses; and
- A cost-effective model specifically built for credit unions’ unique compliance needs.
Credit unions don’t have to navigate the CECL implementation and compliance journey alone. To learn more about Catalyst, visit its Strategic Link partner page or contact Jason Smith, Vice President of Strategic Resources, at 208.286.6794.