Representative Blaine Luetkemeyer (R-MO) introduced a bill to prohibit federal financial regulators from requiring compliance with a new accounting standard that introduces the current expected credit losses methodology ("CECL") for estimating allowances for credit losses. Developed by the Financial Accounting Standards Board, CECL has been designed to replace the existing incurred loss methodology under U.S. GAAP. It is the most significant accounting change to the banking industry in decades.
The bill would (i) prohibit federal financial regulators from requiring compliance with the CECL accounting standard and (ii) require the SEC to assess a proposed accounting standard's broader impact before recognizing any such standard as "generally accepted."
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