Risk Management & Analytics: Webinar will give credit unions information they can act on for CECL preparations

Webinar will give credit unions information they can act on for CECL preparations

Where are credit unions at in their preparation for implementing the Current Expected Credit Loss (CECL) standard? What are the biggest challenges they’re facing? What insights and best practices can they glean and apply from the work their peers have done so far?

On Aug. 21, these questions will be answered in a webinar produced by MountainView Financial Solutions, a Situs company. The webinar will provide in-depth analysis of the results of MountainView’s CECL Implementation Progress Survey for credit unions. The survey was conducted May 9 to June 22 and received responses from CECL committee and project team members at 142 credit unions nationwide.

“In phone and conference conversations with credit union employees over the past 12 months, ‘what are you hearing about what other credit unions are doing for CECL?’ has been a question frequently asked of MountainView’s representatives,” said Atul Nepal, a quantitative analyst at MountainView. “We decided we needed to start providing some data points and factual analyses instead of just answers based on other conversations, and we realized our survey should be specifically focused on credit unions to provide the most insightful and actionable information.”

Based on this consideration, MountainView developed two versions of its CECL Implementation Progress Survey: one for credit unions, and one for banks. The company is reporting the credit union survey results in a white paper that will be published on July 23.

In the Aug. 21 webinar, Nepal will provide context and commentary that translate the survey answers into practical uses such as timetables and benchmarks, next steps in addressing common challenges, and additional resources credit unions can consider for their unique challenges.

The Financial Accounting Standards Board approved the CECL standard on June 16, 2016. The standard goes into effect for credit unions on Dec. 31, 2021.

Click here to register for MountainView’s webinar.

Real-time banking: The risk of doing nothing

“I am not a technology person,” Steve Antonakes tells the audience at a national bank technology conference. “I am a risk person. The biggest risk for community banks is to do nothing in this space.”

After a career as a bank regulator, first at the Massachusetts Division and eventually as deputy director of the Consumer Financial Protection Bureau, Antonakes is now firmly embedded in bank innovation/risk nexus as executive vice president for enterprise risk management at Eastern Bank in Boston.

Eastern became famous for its Eastern Labs unit, launched in 2014 to “disrupt the bank from within,” says Antonakes. Investing 1 percent of annual revenue in the labs, Eastern Bank created an Express Business Loan with a streamlined application – required items in the application dropped from 55 to 8 – and “real-time” loan decisions. The goal: balancing “speed and prudence” while charging competitive rates.

Read more: American Bankers Association Banking Journal

Morgan Stanley boss Gorman hits out at Federal Reserve stress tests

Morgan Stanley’s top executive criticized the Federal Reserve’s annual health checks of the biggest U.S. lenders and predicted changes to the tests going forward after his bank reported better-than-expected quarterly earnings on Wednesday.

The Federal Reserve said last month it would not let Morgan Stanley boost overall capital returns to shareholders after its capital ratio fell below the minimum allowed in the annual stress test. A failure to meet the requirement would normally result in an outright failure.

The tests, set up to prevent a repeat of the 2007-2009 financial crisis, have become “increasingly more demanding” each year, and are now more severe than what the banks experienced during the crisis itself, Chief Executive Officer James Gorman said on a conference call with analysts.

“Ten years on, it’s time to take a fresh look,” he said. “We don’t want to be chasing in the last crisis, we’re trying to figure out the next one.”

Read more: Reuters

Federal Reserve chair faces Democratic fury over stress test results

Senate Democrats rebuked Federal Reserve Chairman Jerome Powell for the agency’s decision to withhold failing grades for three banks on this year’s stress test despite the fact that their capital levels fell below required minimums.

In Powell’s semiannual appearance before the Senate Banking Committee Tuesday morning, Sen. Sherrod Brown, D-Ohio, the committee’s ranking member, wasted little time blasting the Federal Reserve for what he described as an overly lenient approach.

Even though the test performances for Goldman Sachs, Morgan Stanley and State Street were subpar, Brown said in his opening statement, the Federal Reserve allowed all seven of the “largest banks to redirect $96 billion to dividends and buybacks” following the assessments.

Read more: American Banker

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