Beyond consumer losses: What credit unions are missing in CECL and stress testing

Credit unions have become comfortable managing expected losses, but today’s environment is introducing new and less predictable risks. Rising charge-offs, shifting collateral values, and emerging pressures in portfolios like CRE and residential lending are exposing gaps in how many institutions approach CECL and stress testing. The question is no longer just how to account for losses, but how to anticipate what’s coming next.

In this session, Abrigo’s advisory experts will explore how credit unions can move beyond a compliance-driven approach to CECL and begin using it, alongside stress testing, as a strategic risk management tool. Through real-world examples and practical insights, we’ll highlight where traditional approaches may be falling short and how institutions can better identify, measure, and prepare for unexpected losses across their portfolios.

You will learn:

• Where CECL models may be missing emerging or “hidden” risks
• How to recalibrate assumptions (PD/LGD, segmentation, etc.) in today’s environment
• How to evaluate the impact of changing collateral values on loss expectations
• What regulators and auditors may begin scrutinizing more closely
• How to turn CECL and stress testing into forward-looking decision tools, not just compliance exercises