Pub. 5 2015-2016 Issue 6

8 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S FEATURE ARTICLE KEITH E. MONSON CHIEF RISK OFFICER COMPUTER SERVICES, INC. CECL: No Bank is Exempt 5 Ways Your Bank Can Prepare Now And no institution is exempt from CECL, despite some lingering assumptions to the contrary. All must adjust their data collection and parsing to comply with CECL guidance. But while you’re waiting for the final word on CECL, expected in first quarter 2016, here are five tangible things to do now: 1. Educate Key Stakeholders CECL discussions should pull in such key leaders as the chief credit officer, chief financial officer, chief risk officer and chief information officer. Senior lenders also should be repre - sented, as should compliance and business in- telligence officers. Finally, senior management must be involved in order to make effective budgeting decisions based on the impact to the bank’s capital. The type of information departments need to know varies by function, but all should un- derstand these key facts: • Background: The 2008 financial crisis led the FASBand other regulatory agencies to conclude I t’s true: the Financial Accounting Stan- dards Board’s (FASB) f inal Current Ex- pected Credit Loss (CECL) model wi l l fundamental ly change the way our en- tire industry accounts for loan loss reserves. No institution is exempt from CECL, despite some lingering assumptions to the contrary. All must adjust their data collection and parsing to comply with CECL guidance.