Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
FASB impairment changes unneeded CUNA says
WASHINGTON (4/6/11)--Noting that credit unions are already “among the most highly regulated financial institutions in this country,” the Credit Union National Association (CUNA) has said that a number of proposed accounting changes are inappropriate for credit unions. Under a joint Financial Accounting Standards Board (FASB) / International Accounting Standards Board (IASB) proposal, entities would need to base expected losses on all available information—including forward-looking information, as well as assign financial assets to a "bad book" or "good book" for purposes of determining their impairment allowance. CUNA in a recent comment letter to FASB said that these and other changes to accounting for the impairment of certain financial instruments are inappropriate for credit unions because of their unique cooperative structure. Credit union members “already receive significant disclosures about the accounts they wish to open and maintain and about the financial condition of their institutions,” and thus there would likely be little, if any, benefit in providing their members with additional disclosures, CUNA added. In addition, CUNA questioned whether such disclosures “should be imposed on credit unions through the accounting standards setting process.” CUNA suggested that financial institution regulators such as the National Credit Union Administration would be better equipped to impose these disclosures. However, CUNA added, there is no evidence that additional disclosures are needed. The proposed requirements may be more appropriate for publicly traded entities, especially since shareholders’ investments in a publicly traded company are subjected to risks that generally do not apply to credit union deposits,” which are generally insured up to $250,000 per account, the comment letter adds. Portions of the proposal are likely “too complex for many entities and may be inconsistent with the actual practice of estimating losses or managing credit risk,” CUNA said. Specifically, CUNA said it is concerned that many smaller reporting entities lack the ability to accurately estimate the lifetime expected losses of open portfolios of assets. Many of FASB’s suggested financial statement changes could severely burden credit unions while supplying little or no benefit to the credit union, its members, or its regulator, CUNA added. CUNA encouraged FASB to extend the comment period on this proposal. However, the comment period ended late last month. For the full comment letter, use the resource link.


RSS





print
News Now LiveWire
.@NACHAOnline report: ACH volume increases to 23B payments in 2014 http://t.co/va2WYMh4Zv
16 hours ago
.@CUNA's @HampelBill in @washingtonpost on options for wary mortgage borrowers: http://t.co/CPSgTNgwmm
21 hours ago
Housing starts thaw, mortgage rates stand pat #Market #NewsNow http://t.co/hhPj5v5AH3
22 hours ago
.@CUNA files #RBC2 comment, urges #CU system to be heard #NewsNow http://t.co/yfoZHAMlZc
22 hours ago
#NewsNow Youth Month attracts 100,000th member for Mich. CU http://t.co/cgF5o83XlK
22 hours ago