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From the CEO: This CECL is not the friendly dragon I grew up with

From the CEO
April 7, 2016

Dear members:

Remember Cecil the dragon from the animated cartoon Beany and Cecil? Whether or not you recall that friendly character, the “Cecil” we are most familiar with these days is the financial industry’s CECL (current expected credit losses). Big changes are coming soon to the way credit unions calculate ALLL (allowance for loan and lease losses) under the new CECL rules proposed by the Financial Accounting Standards Board (FASB).

And we’ve got a solution. I’m excited to announce that our very own Accolade Asset/Liability Advisory Services is offering a new Loan Advisory service tailored to small and mid-sized credit unions that not only helps credit unions comply with the new CECL rules but also helps credit unions find future lending success.

We know that the new CECL rules have been top of mind for many of you, and during our Member Connect Summits last October, we highlighted the details of FASB’s project to overhaul the guidance for credit losses. We listened to your concerns and went about developing a solution to help our members succeed in meeting the new challenges of CECL. If you would like a refresher on some of the details of CECL, you can check out this Solutions article by our EVP and CFO Melissa Ashley.

So how does Accolade’s new Loan Advisory service meet credit unions’ needs? It goes well beyond just accounting and CECL and provides you with comprehensive, forward-looking management for every aspect of a credit union’s loan business, including ALLL accounting, credit-risk management, and portfolio management. Credit unions can even use the data the service provides to create proactive, targeted marketing opportunities to their members.

Member loans make up the vast portion of your assets. Making the switch from older, portfolio-based, historical loss models to forward-looking, loan-level analytics and reporting is critical to not only adhere to the new rules but also to provide you the management information you need to be a successful lender. I’m sure you would agree with me that high-quality balance sheet analytics and portfolio management is essential, regardless of your asset size.

The new CECL rules will go into effect for fiscal years beginning after December 2019. While that may seem like a long time away, the sooner you establish a dynamic, well-calibrated model, the more time you will have to prepare for this significant change. For example, there could be big differences between how much you’re reserving today and how much you need to reserve in the future. The sooner you learn about your balance-sheet variances, the sooner you can do something about them.

I encourage you to learn more about Accolade’s new service at You can also read their recent online articles at

Lee Butke