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7 To-Dos for Success with Auditors and Regulators

Brandy Aycock
August 5, 2016
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How are auditors and regulators viewing the transition to CECL? How can banks and credit unions plan accordingly?

At the MST 2016 National ALLL Conference, Molly Curl and John Reedy of Grant Thornton, LLP gave banks and credit unions practical ideas for preparing for CECL implementation, ideas rooted in the understanding that estimating the allowance will change things enterprise-wide for financial institutions:

1) Integrate credit risk and allowance functions. Marry the information together to make them work with each other.

2) Evaluate expected credit loss scenarios to find what’s working well.

3) Implement model validation and MRM.

4) Compile data.

5) Don’t spare costs – take steps needed now for appropriate measurement in the future.

6) Documentation critical for auditors and regulators: loan groupings, forecasts, assumptions, controls, processes, etc.

7) Sound credit risk practices = strong CECL model development and implementation.

Check out the MST Talk with John Reedy on Understanding the Regulatory Implications of CECL. Watch for the full National ALLL Conference Digest coming soon.

Wondering what steps you should take to move toward CECL implementation in your bank or credit union? Download our Seven Steps to a CECL-Compliant Model whitepaper.

MST Talk videos  You’ve heard of TED Talks, those quick videos filled with information that makes you think. Now there are MST Talks, short videos on the ALLL, CECL and everything you need to know about transitioning from an incurred to an expected loss allowance model. The videos are of industry experts who presented at the MST 2016 National ALLL Conference in May. We will release the series, one by one, over the coming weeks. Click here to access the playlist of released MST Talk videos.

About the Author

Brandy Aycock

Brandy Aycock is Director of Event Marketing at Abrigo.

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

Make Big Things Happen.

 

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