The Independent Community Bankers of America® (ICBA) said the Financial Accounting Standards Board (FASB) has taken another important step in addressing community bank concerns with its proposed accounting standards update. FASB advanced a revised Current Expected Credit Loss proposal exempting many community banks from certain new financial statement disclosure requirements that would have been excessively burdensome for their non-complex business model. In addition, FASB extended the implementation dates for an additional year for all financial institutions.
“FASB has again shown a willingness to listen to the concerns of ICBA and the nation’s community bankers in this latest reform to its Current Expected Credit Loss plan,” said ICBA Vice Chairman Timothy K. Zimmerman, president and CEO of Standard Bank in Monroeville, Pa. “The work completed to date on this accounting reform reflects meaningful changes that will make the standard more flexible and scalable for community banks.”
The vote by the FASB board addresses many ICBA concerns expressed in a recent letter to FASB Chairman Russell Golden. While FASB had already taken steps to allow community banks to continue using their personal understanding of their local markets to determine their loan-loss reserves, ICBA was concerned with certain disclosure requirements. The changes to the disclosure requirements will provide relief to many community banks and is an important step in the right direction. However, ICBA believes more community banks should have been exempted from the vintage year disclosure requirements.
ICBA, its affiliated state associations, and community bankers have worked to address problems with FASB’s CECL proposal since it was introduced in 2011, including delivering a petition to FASB with nearly 5,000 signatures. Following years of ICBA advocacy, FASB released the revised draft at this month’s meeting of the Transition Resource Group, to which Zimmerman was appointed as the sole community bank representative. ICBA looks forward to continuing to work with FASB and federal banking regulators on this initiative.
The Independent Community Bankers of America®, the nation’s voice for more than 6,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.