According to the ABA Banking Journal, discussions about the implications of the new loan impairment standard will move to the boardroom as the CECL implementation date draws near. The conversation will then shift to broader issues, including financial management and performance of the bank.
During a recent ABA webinar, Larry Sorensen, CFO of Washington Trust Bank in Spokane, Washington, played the role of a CFO in a mock board meeting to discuss CECL. Loan committees and chairs should be positioned to play a role to facilitate the discussions. The webinar offers insights regarding questions board members may want to ask about CECL.
Some of the topics covered in the webinar include why CECL might trigger volatility in earnings and capital; how it will impact loan terms and products, and how budgeting and strategic planning will be affected.