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.
Interested In This Report
Related content
April 17, 2023
Private-Label Credit Cards: Still Relevant but Losing Luster
Private-label credit cards are an essential part of the U.S. card market, but they are a product in slow decline and face several threats, including instant point-of-sale financing...
March 15, 2023
Cobranded Credit Cards 2023
The cobranded card market is a way to generate loyalty, scale your portfolio, and service the next generation of cardholders.
February 08, 2023
The Credit Card Data Book Part Two: Internal Dynamics
The Credit Card Data Book is a two-part annual publication that covers the internal and external factors affecting the U.S. credit card market. The first part focuses on environmen...
Make informed decisions in a digital financial world