CECL: Proven in the Field and Ready for Prime Time
- Date:October 18, 2021
- Author(s):
- Brian Riley
- Research Topic(s):
- Credit
- PAID CONTENT
Overview
Bankcard accounting requirements for recognizing credit losses at top banks became subject to more conservative rules following the Great Recession and Dodd-Frank. The process, which took effect in 4Q 2019, helped the industry prepare for unanticipated losses and was acid-tested during the COVID-19 outbreak. Although credit losses never materialized, top issuers could offset lost revenue from changing consumer purchase trends as they recovered their loan loss reserves in 2021. The new accounting standard, known as Current Expected Credit Loss (CECL), will soon apply to smaller banks and credit unions. Although the process accelerates losses and may seem severe, the policy changes better position banks from failures and, in the long term, protect financial institutions and investors.
Learn More About This Report & Javelin
Related content
June 24, 2025
From Hype to Impact: How AI is Transforming Credit
Advances in artificial intelligence have generated a high level of excitement and marketing spending as financial organizations seek to rebrand their technologies with “AI” and dev...
June 23, 2025
Amex and Chase Face Off on Premium Credit Cards, but the Backstory Is More Interesting
Moves by American Express and Chase to revamp their signature card reward products will bring the issuers into greater competition for the most affluent cardholders and carry rever...
May 13, 2025
How Will Agentic Commerce Affect Consumer Credit?
Recent product announcements from leaders in the payments industry demonstrate the excitement surrounding new AI technologies. AI isn’t just a buzzword anymore, and AI-powered pers...
Make informed decisions in a digital financial world