ABA Letter Requests CECL Relief for Community Banks
Summary
The American Bankers Association sent a letter to the Financial Accounting Standards Board regarding post-implementation issues with the Current Expected Credit Loss (CECL) accounting standard. ABA emphasized that for community banks, CECL implementation costs far outweigh the benefits, citing significant recurring costs for model validation, documentation of qualitative analysis, and other operational burdens. ABA called on FASB, regulators, and auditors to work with community bankers to reduce costs and expand the use of external information for more efficient credit loss estimates.
What changed
ABA submitted a letter to FASB supporting the board's post-implementation review of CECL standards and requesting relief for community banks. The letter cites significant recurring costs including model validation and qualitative analysis documentation as key burdens. ABA stated that while fixing this may not be FASB's sole responsibility, an intentional ongoing effort involving FASB, community bankers, banking supervisors, and auditors could right-size internal control expectations.
Community banks subject to CECL accounting requirements should monitor FASB's May 12 public roundtable and any subsequent guidance. Banks facing disproportionate compliance costs may benefit from engaging with regulators and auditors to advocate for more efficient credit loss estimation approaches.
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Apr 18, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
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April 17, 2026 Reading Time: 1 min read In a new letter to the Financial Accounting Standards Board related to implementation issues of the Current Expected Credit Loss, or CECL, accounting standard, the American Bankers Association emphasized that “a consistent message has emerged: for community banks, CECL costs far outweigh its benefits.”
The letter comes in support of FASB’s “post-implementation review” process over new standards, with a public roundtable scheduled for May 12. Citing the significant recurring costs of model validation and the documentation of qualitative analysis, as well as other issues, ABA called on FASB, regulators and auditors to work with community bankers to reduce these costs and expand the use of various types of external information to enable more efficient and transparent credit loss estimates.
“While we believe this path forward is not necessarily the responsibility of FASB, we do believe that an intentional and ongoing effort that includes FASB, community bankers, banking supervisors and auditing representatives can eventually right-size internal control expectations while providing better decision-useful information,” ABA said.
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