CECL
The current expected credit loss (CECL) is an accounting standard that changed how depository financial institutions of any size account for expected credit losses. CECL requires financial institutions to record “life of loan” loss estimates at origination or purchase. This replaced the Incurred Loss (ICL) accounting model.
- FAQs for all your Current Expected Credit Loss (CECL) questions
- Learn more about our CECL solution
Whitepapers
Jan 1, 2018
The CECL approach estimates both probable and projected portfolio losses over the portfolio life. Complexities arise when you have to anticipate repayment and the rate of prepayment. This can be difficult depending on the type of loan. Explore strategies for balancing the rollover risk and reserves.
Jan 1, 2020
CECL is different from the current loan loss reserve approach since it includes both probable and projected losses over the life of the loan. Learn how this impacts bankers with a diversified loan portfolio.
Podcasts
Nov 15, 2021
Part 2 of our 2-part series on CECL discusses getting started with CECL, and the use of spreadsheets. Andy Hines, Chief Lending Officer, and EVP at The Bank of Glen Burnie, joins us again to share his insights on getting started with CECL, his thoughts on spreadsheets, and more.
Oct 20, 2021
Part 1 of our 2-part series on CECL covers data organization and explaining CECL results to stakeholders. We sit down with Andy Hines, Chief Lending Officer, and EVP at The Bank of Glen Burnie, for his insights on both.
Nov 17, 2022
Chief Credit Officer, Michael Kerr of First Federal Bank shares his experience with CECL, and why his institution ultimately decided to outsource CECL, after starting off in-house.
Webinars
Nov 8, 2018
You've selected your methods, but can you defend them to regulators? Whether your loan structures are standardized or complex, selecting the right methodology is not a simple task, and being confident in your selection is a must. With lots of CECL methods to look at, how do you know you've made the right choice?
Oct 16, 2019
A new accounting standard means lots of changes, including how qualitative factors (Q Factors) apply. In this webinar, gain an understanding of Q Factors with CECL, and learn how they need to be applied under CECL compared to the incurred loss model.
Jan 26, 2022
In this virtual roundtable with a panel of community financial institution executives, we explored their journey of implementing CECL. Here are the strategies, lessons learned and insights that they can share with their peers based on their implementation journey.
Nov 14, 2017
Join PCBB as we work through live examples of different methods and evaluate the pros and cons.
Oct 23, 2024
The impact of CECL has been different for small and large CFIs, reflecting the differences in portfolio composition and pre-existing accounting practices between these institutions. We discuss contributing factors.
Jul 29, 2021
The Federal Reserve recently released its CECL tool, SCALE. Is this option right for your institution? We explain what it is, how it works, and provide you with considerations when reviewing it as an option, including its use of industry data, adjustments to expected loss rates, and no automatic linking with other solutions.
Sep 14, 2021
The CECL deadline for community financial institutions is January 1, 2021. Is your institution ready? Many are not. If your balance sheets are too complex or you don’t have in-house experts, you will want to consider a third-party vendor. Here are five key areas to explore when looking for a suitable CECL vendor.
Sep 27, 2021
Time is of the essence in implementing CECL, as there are many decisions and details involved. One of the most important areas to assess is your institution’s calculations. Once you have calculated your loan loss reserve, you will want to be sure you have addressed the top five areas where these calculations can go awry. Here they are.
Oct 4, 2021
The personal consumption expenditures price index rose more than 3.6% YoY, according to the US Commerce Department. With inflation here for now, community financial institutions should update their loan and liquidity stress tests to ensure they are ready for anything. Here are three steps to prepare your institution for the coming effects.
Oct 20, 2021
When bankers think of CECL, greater efficiencies may not come to mind immediately. Yet, as community financial institutions work through the CECL implementation they are realizing that CECL gives them an opportunity to achieve greater efficiencies for the future. In our podcast, Banking Out Loud, Andy Hines of Bank of Glen Burnie brought this up and we explore this topic further today.
Dec 30, 2021
While the BID takes a rest for the holidays, we revisit some of the year's most popular articles.
Feb 2, 2022
Recently, the OCC released its annual report on the federal banking system’s condition. Although the average capital levels were good and the federal banking system’s liquidity ratio was more than 3x the historical average, certain risks in the industry have increased. We give you some of the report highlights, including three important areas of focus for increased risk.
Feb 7, 2022
While most big and mid-sized banks have already implemented the new CECL standard, many community financial institutions are waiting until their deadline of January 1, 2023. Yet, there is a lot to do this year to ensure you are compliant, including running CECL in parallel. Here are three guiding principles that we recommend to keep you on track as you perform your parallel runs.
Mar 29, 2022
The deadline for CECL has not been extended and January 1, 2023, is coming up fast. Are you ready? One specific area of focus for many bankers is using Q Factors consistently. While Q Factors aren’t new, their expected application in CECL is more involved. Here are four Q Factor best practices to prepare you.
May 12, 2021
CECL is not far away with a January 1, 2023 start date. Many bankers have put CECL on the back burner during COVID, but it is time to focus on CECL again. To get you started, we share six steps for completing CECL: form a team, create a timeline, look for third-party expertise, evaluate ALM and stress test, review lessons learned, and utilize resources.
Feb 12, 2021
CECL hasn’t been at the forefront of bankers’ minds given the pandemic. However, it is still happening and auditors and examiners will be asking questions about CECL. One area to think about is how CECL will affect your institution’s securities. We give you insight into CECL and HTM, AFS, and trading securities.
Jan 4, 2021
As we welcome in the new year, there are several regulatory areas to pay extra attention to. We cover COVID-19 flexibility, CECL implementation efforts, the LIBOR transition, CRA changes, and more.
Nov 23, 2020
With the pandemic, CECL may not be top of mind. So, we have three considerations to keep you on track.
Mar 16, 2020
The big banks are reporting on their CECL reserve. Community financial institutions can learn from what they are sharing.
Mar 3, 2020
Investors are already making adjustments to market valuations, based on how much they project CECL will affect the loan portfolio. Be prepared.
Feb 20, 2020
Like other financial institutions, FNMA and FHLMC must follow the rules of CECL. Yet, if these two GSEs adopt CECL compliance all at once, it could mean withdrawing billions of taxpayer dollars from the Treasury in 2020.
Jan 9, 2020
While CECL is delayed, that's not a reason for your financial institution to sit on its hands.
Nov 12, 2019
As big banks start finalizing numbers for CECL, other financial institutions can learn from their findings. We report on some of these findings.
Oct 16, 2019
As you analyze the risk of CECL and its impact, we offer our final AICPA article covering the key message--don't delay.
Oct 9, 2019
Today we discuss why it is important to have a new perspective with CECL, in the second article of the AICPA series. Check back next Wednesday for the third and final article.
Oct 2, 2019
The AICPA provided tips on CECL through its practice guide. We break it down for you in the first of three articles.
Check back next Wednesday for part two of the series.
Sep 18, 2019
For CECL, banks must assess risk over the life of a loan. Getting enough data for that can be a challenge. We provide help.
Aug 15, 2019
The purpose of Q factors doesn't change in the adjustment from Incurred Loss to CECL. However, there is a big difference in how the CECL standards treat Q factors.
Aug 13, 2019
In our fourth "Inquiry and Insight" issue, Steve Brown answers questions on phishing, CECL and online lending competition.
Jul 29, 2019
FASB has made it clear that CECL is complex enough to propose extending the deadline. Knowing that, we provide you with a few things to remember as you assess your timeline.
Jul 23, 2019
As every banker has heard, FASB made a big announcement on CECL last week. We answer an important question many bankers are asking.
Jul 15, 2019
The American Institute of CPAs is planning to shed some light in its upcoming release of guidance on CECL. As the only bank in the AICPA Task Force Meetings, we share some thoughts on the main points covered.
Jul 8, 2019
Optionality can be challenging with CECL. We provide some tips to address the optionality of prepayments for your CECL calculations.
Jun 26, 2019
To some community banks, WARM looks like a simple way to extrapolate current loss rates over the required life of a loan for CECL. However, there are limitations to consider.
May 8, 2019
Although CECL has been around for some time, there are still questions around method selection. We walk you through it.
May 1, 2019
There is never a dull moment with #CECL. Get the latest FAQs published by the FDIC compiled based on ongoing questions, new developments and recent updates.
Apr 5, 2019
To implement CECL, your bank will need a dry run to see how your loans and allowances will fare under the new loss-accounting standard.
Mar 18, 2019
For bankers coming to the end of their CECL build phase and now seeing dry runs of reports, some may find dialog with investors picking up too. We explain how to set up your communication strategy.
Mar 11, 2019
We have recently heard that some banks are considering using Weighted Average Remaining Maturity (WARM) for their CECL calculations. Is WARM right for CECL?
Jan 8, 2019
There is a lot of information out there on CECL. We provide you with the Top 5 Things to Remember as you get ready for implementation.
Nov 1, 2018
The extra data collected for CECL has been found to not only be useful for CECL calculations but also for strategic planning. We explain how.
Aug 20, 2018
As CECL draws closer, only 3% of community banks are ready to implement it. A new survey from RMA shows what banks are doing and covers some of their biggest concerns.
May 16, 2018
CECL is ticking closer. We provide you with some questions your examiners may ask around CECL during your next exam to prepare you.
May 9, 2018
CECL is coming and bank management will need to answer questions from its board of directors as they prepare. Here are some questions to expect.
Apr 20, 2018
One of the keys to CECL is understanding how each method works. We give you important information and resources on this.
Dec 28, 2017
It seems everywhere we turn these days, we hear about CECL. What your bank should know and how to prepare.
Dec 8, 2017
CECL is coming and community banks may need to look for outside assistance. What key attributes should your bank use to assess CECL vendors?
Nov 29, 2017
CECL and life of loan may lead bankers to consider shortening loan duration. But, that may not always be the best strategy.
Nov 16, 2017
Lately, bankers are trying to get their hands around the Current Expected Credit Loss (CECL) standard. Some tips to get you started.
Oct 31, 2017
Regulators published their latest CECL FAQs. Check out our quick reference of this document.
