National Credit Union Administration Chairman Rodney Hood raised concerns about the Financial Accounting Standards Board’s Current Expected Credit Loss standard during a Thursday hearing before the House Financial Services Committee.
Noting that CECL “keeps me up at night,” Hood told lawmakers about the impacts the new standard could have on credit unions. Representatives from both sides of the aisle called for the delay of CECL’s implementation or a legislative block for the new rule.
“We will not tolerate actions that threaten the stability of our financial system, Chairwoman Maxine Waters said during the hearing, which also included testimony from Comptroller of the Currency Joseph Otting, Federal Reserve Governor Randal Quarles and FDIC Chairman Jelena McWilliams. The four regulators
Rep. Blaine Luetkemeyer, R-Mo., echoed concerns that CECL “doesn’t prescribe to estimate loss allowances,” hence allowing banks and other financial institutions to use their own judgment in developing methods that are both practical and appropriate.
Lueketmeyer also argued that his new anti-money laundering bill – which includes a provision to increase the CTR threshold from $10,000 to $30,000 – would lower the burden imposed for small credit unions who have to file.
“Anything beyond what is there today, we would greatly appreciate it,” Hood said in regard to the threshold.
“It is a significant issue [that] credit unions are burdened by,” he added. The industry “would appreciate having the five-year cycle because they would have to adjust as tweaks are made.”
Hood also emphasized his own concerns about cybersecurity, but said he welcomes the opportunity to work with the Financial and Banking Information Infrastructure Committee.
Responding to a question from Rep. Denver Riggleman, R-Va., on whether there are “too many cooks in the kitchen” when it comes to cybersecurity guidance of financial institutions, Hood said he looked forward to working with the FBIIC and others, saying it’s “healthy to have different viewpoints and different items for debate and discussion.”
Hood’s written testimony to both the House and Senate committees called on Congress to loosen restrictions on loan maturities for federal credit unions – a regulation “stuck in the 1940s,” according to Rep. Lee Zeldin, R-NY, who has previously co-sponsored a bill to loosen help change those rules.
“The shorter maturities we have now are preventing many individuals from having access to mortgage lending opportunities and even business lending opportunities,” said Hood. The more that can be done to expand access to credit for hard-working consumers, he added, “I’m for it.”
