Accounting standards

Both Democrats and Republicans devoted considerable time at a House Financial Services Committee hearing last week to lamenting how the accounting standard will hurt small lenders.

National Credit Union Administration Chairman Rodney Hood’s testimony Thursday was reportedly the first time in three years the agency has appeared before the House Financial Services Committee.

Democrats and Republicans on the House Financial Services Committee called for steps to minimize the harm to community banks and credit unions bracing for the new accounting standard.

The American Institute of Certified Public Accountants says banks are fighting accounting fatigue — thank CECL for that — and wants the FASB to push back a deadline for privately held firms to put operating leases on their balance sheets.

Banking officials can reasonably disagree on new standards for current expected credit losses, but the accounting body developed the rules over many years and based them on extensive feedback.

The standards board has been granted vast authority without having to answer to policymakers, and its latest accounting method, CECL, will be a disaster for small banks.

During the first full day of the National Credit Union Collections Alliance's annual conference, speakers discussed what regulators are focusing on and shared best practices for debt collections.

With an implementation deadline less than a year away, bankers will be pressed to detail how a new accounting rule for loan losses will affect reserves, earnings and capital.

The regulatory relief bill passed last year eliminated mandatory stress tests for dozens of regional and midsize banks, yet many banks continue running internal tests anyway. Here’s why.

Publicly traded banks will have to book expected losses on loans starting next year; the jump in mortgage refinancings could be a mixed bag for banks.

Congress granted banks significant reg relief last year, but incoming ICBA Chairman Preston Kennedy says a lighter touch is needed with Bank Secrecy Act rules, loan-loss modeling and call reports.

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J. Mark McWatters, chairman of NCUA, and Rick Metsger, a board member, also said that Congress should give the agency more authority over field of membership for underserved areas.

The new accounting standard won’t make community institutions safer, though implementation is proving burdensome and could restrict access to credit, argues Rep. Blaine Luetkemeyer.

FASB this week is also expected to discuss credit loss standards while a House subcommittee will discuss student borrowers and loan servicing, and more.

Addressing lawmakers for the second straight day, the Fed chairman defended his agency’s refinements to the post-crisis regime.

Credit card issuers would have to set aside more in reserves because of higher loss histories, according to research by Keefe, Bruyette & Woods on the impact of the new loan-loss standard.

Rep. Blaine Luetkemeyer, R-Mo., told the mortgage giants' chief federal regulator that the Financial Accounting Standards Board’s new model for estimating loan losses could pose risk across the mortgage market.

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A former audit executive at Citi and Amex, Julie Scammahorn is replacing David Julian, who remains on administrative leave. She will join the bank in April.