Financial institutions have endured a number of unexpected challenges throughout 2020 as they’ve worked to support customers and members amid the coronavirus pandemic. While many of this year’s challenges have been unforeseen, the move to the current expected credit loss, or CECL, standard has been on the horizon for many years. This year, most SEC filing financial institutions were required to move to the new standard, and they juggled managing their reserves in preparation for both CECL and for pandemic-related implications.
With the disruptions caused by PPP, loan workouts, and other efforts to keep customers afloat, some financial institutions’ timelines for preparing for their 2023 transition to CECL might have been put on the back burner. Luckily, it seems most financial institutions have remained committed to their CECL preparations. During Abrigo’s recent CECL symposium, more than 300 attendees participated in an informal poll on key CECL topics, highlighting their current concerns and progress. While the coronavirus pandemic has created a number of new challenges, just six percent of attendees responded that the pandemic had derailed their timeline when polled on their largest CECL challenges. While this is good news, there are considerable questions and obstacles financial institutions still face with regard to their CECL transition.