BPI sent the Financial Stability Oversight Council (FSOC) a letter requesting that the FSOC work to evaluate the systemic and economic risks posed by CECL and engage the Financial Accounting Standards Board (FASB) and regulatory agencies to seek a delay in CECL’s implementation.
The letter notes BPI’s concern that the implementation of CECL could undermine financial stability in a future recession or financial crisis, as its requirements establish disincentives for banks to extend credit, especially during stressed economic conditions. These same requirements are likely to adversely affect the availability, structure and price of credit at all times, with a disproportionate impact on residential mortgage, small business, student, and unsecured term and non-prime lending.
