ABA Banking Journal - September/October 2016 - (Page 25)

FEATURE > LOAN LOSS ACCOUNTING CECL from the Inside: A Conversation with FASB's Russell Golden E ditor's note: ABA has worked closely with the Financial Accounting Standards Board during the seven-year-long process of developing the new Current Expected Credit Loss model for loan loss accounting. While ABA and FASB have often disagreed, ABA has worked to maintain an open and productive relationship in order to help community banks implement the new standard. With the final CECL standard now released (see page 20), ABA VP Michael Gullette spoke with Russell Golden, FASB's chairman since 2013. Golden has served as a FASB board member since 2010 and previously spent six years as a senior staff member at FASB. Gullette highlights the collaborative relationship between FASB and ABA. "Though we would have preferred a different model, we were never turned down for a phone call, conference call, speaking engagement or a meeting," he says. "That is pretty incredible." Q We know that the Financial Stability Board, the banking regulators, as well as some banks, requested that the FASB amend its loan impairment accounting to be more forward-looking. The question is, why CECL? A Banks do not underwrite to perfection. When a bank originates loans, it has an expectation of credit losses. While a thorough underwriting process occurs to manage credit losses, historical experience shows that not every borrower will repay. Therefore, the aba.com/BankingJournal | ABA BANKING JOURNAL 25 http://www.aba.com/BankingJournal

Table of Contents for the Digital Edition of ABA Banking Journal - September/October 2016

PRESIDENT'S VIEW
UPFRONT
LEGAL BRIEFS
PICTURE THIS
COVER STORY
CECL FROM THE INSIDE: A CONVERSATION WITH FASB’S RUSSELL GOLDEN
WHERE ‘HABITS OF ECONOMY’ WERE SHAPED
HAT TIPS
CARD-LINKED REWARDS GIVE BANKS A COMPETITIVE EDGE
MARKETING
CYBERSECURITY
BANK-INSURANCE SALES
ABA COMPLIANCE CENTER INBOX
FROM THE STATES
CORPORATE SOCIAL RESPONSIBILITY
INDEX OF ADVERTISERS

ABA Banking Journal - September/October 2016

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