Comment Letter to FASB on CECL Effective Date

The American Bankers Association (ABA) appreciates the opportunity to comment on the Exposure Draft Proposed Accounting Standards Update—Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (The Proposal). The Proposal creates a new system to differentiate large companies from smaller companies and to delay the effective date for the smaller companies for three recent accounting standard updates, including ASU 2016-13 (also known as “the CECL standard”). As it relates to CECL, the effective date for smaller companies will be deferred until to January 1, 2023, for calendar year-end companies. Smaller companies within the Proposal include those that are Securities and Exchange Commission (SEC) registrants (SRCs). The proposed delay thus would pertain to private companies and smaller public companies. According to ABA estimates, approximately 200 SEC registrant banking organizations would qualify for the delay.