Rep. Gregory Meeks (D-N.Y.) is the latest lawmaker to call on U.S. accounting rulemakers to suspend major new credit loss accounting rules until the cornonavirus pandemic ends.
Meeks, with long-time FASB critic Rep. Blaine Luetkemeyer (R-Mo), in a letter Monday urged the Financial Accounting Standards Board to postpone the current expected credit losses (CECL) accounting standard. The standard will force businesses to record losses they expect to see instead of waiting for customers to miss payments.
- Meeks, who chairs the Subcommittee on Consumer Protection and Financial Institutions, has expressed concern about the accounting change, particularly how it could affect small banks in minority communities, but hasn’t signed on to formal efforts to stop it.
- “There is simply too much uncertainty at this time to implement a foundational change to our financial accounting system,” the lawmakers said. Large banks are already following the new rules, as of Jan. 1; other entities are slated to comply in 2023.
- The call for relief comes as FASB is under unusual scrutiny. On Sunday, the GOP’s draft coronavirus relief bill included a provision allowing banks to opt out of the CECL standard.
- Luetkemeyer and three other lawmakers wrote to FASB on Friday making a similar plea to reconsider the accounting overhaul.