(June 25, 2021) NASCUS President and CEO Lucy Ito said the state system embraces both new rules, which the association had supported. On interest capitalization, Ito said the new rule will provide greater flexibility for the credit union system to work with economically distressed members. “This rule will expand the options for loan repayments by members working to regain their economic footing as the financial impact of the coronavirus crisis begins to recede,” she said.
On the CECL standard rule, Ito thanked the board for heeding the state system’s suggestions on recognizing fiscal years and clarifying eligibility for small, state-chartered credit unions subject to GAAP.
She also took note of comments by NCUA Board Vice Chairman Kyle Hauptman about CECL and its applicability to credit unions as financial cooperatives. “Vice Chairman Hauptman keenly observed the cooperative structure of credit unions differentiates them from other financial intermediaries,” Ito said.
However, she added that “NASCUS believes CECL should apply to credit unions given their business functions as depositories and lenders. We look forward to working with NCUA on tools and resources to assist credit unions in complying with CECL in a cost-effective and time-effective manner.”