There have been continual conversations within the financial institution industry as how to best prepare for the upcoming regulatory changes required by CECL (Current Expected Credit Losses). While various methodologies are being considered, the Expected Loss or PD/LGD approach has been discussed in many of those evaluations.
CECL is coming! Are you prepared to leverage this new model or prepared to scramble? CECL — the Current Expected Credit Loss model — comes into effect for SEC institutions in 2020 and if you’re not already working to understand the challenges of CECL, you should be preparing how to adjust your methods to remain compliant and competitive.
The End of the Educated Guess
This is the first of a mulit-part blog series on what lenders need to know about CECL. We will discuss how CECL is different from historic loss analysis, how your business needs to adjust, and what you can do now to ensure your business remains compliant and competitive.