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CECL, Credit Cards and Small CUs

  • 1.  CECL, Credit Cards and Small CUs

    Posted May 17, 2019 02:31 PM
    ​Whenever I'm having problems sleeping, I've been thinking about CECL methodology (and yes, it usually helps!).  My main stumbling block remains to be how to address our Credit Card portfolio.  (PIF monthly vs Balance carried, seasoned vs new, funded vs unfunded??? #%^$##%) We are under $15 million in assets and have less that 400 cards, but some cards have been active since 1987.  Our old data processor forced us to create a new "loan" every time we changed the card # due to compromise, etc, so the age of the card account understates the age of the credit line on average, We are running at about 30% utilization, so we have a substantial unfunded liability in addition to addressing our current outstanding balances.  If any other small CU out there in "CUES"land has gotten to the point of starting/working on their credit card segment, I would really appreciate the opportunity to visit​.  I'm hoping to find something that can be supported by call report data since we did a dp conversion in 2014 and I only have access to limited data back to 2011.​

    Kathryn Briggs
    Family First FCU
    Great Falls MT

  • 2.  RE: CECL, Credit Cards and Small CUs

    Posted May 20, 2019 08:27 AM
    Edited by Lisa Hochgraf May 20, 2019 08:27 AM
    Hi Kathryn,
    I'm no stranger to insomnia and I think I may try your CECL methodology sleep strategy sometime! :)

    I reached out to card portfolio expert Tim Kolk of TRK Advisors ( about this question and here are his thoughts:

    "As far as I know, there has been no definitive regulatory opinion offered on how credit card is to be handled under CECL. I have been asked this a number of times, and my advice is for credit union leaders to consult with their auditor/accounting firms for opinions--and also proactively ask their regulators what methodology offers 'safe harbor'.

    "Credit card has unique complexities that have even the largest issuers struggling with methodology questions. And once a model is accepted, future implications are hard to predict, as various economic and risk scenarios evolve over time. We really need better leadership from our regulatory partners on this issue."

    I wish there were more solid answers at this point!

    Warm regards,

    Lisa Hochgraf
    Senior Editor

  • 3.  RE: CECL, Credit Cards and Small CUs

    Posted May 20, 2019 09:46 AM

    Thank you Lisa.  It is true that Credit Cards seem to be the black sheep of the CECL herd for those of us who are trying to avoid 3rd party providers.  Since we still have time, I will definitely ask my examiners who will no doubt indicate that we need to make our own decision of how to handle cards.  Then, next exam they will tell us we did it wrong!  Sigh....




    Kathryn L Briggs

    CEO,  Family First FCU

    Great Falls, MT

    NMLSR #410439


    Fax 406-727-0052


    "Opening Doors to Your Future"


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  • 4.  RE: CECL, Credit Cards and Small CUs

    Posted May 20, 2019 11:05 AM
    Hi Kathryn,

    Have you viewed the webinar The Ultimate CECL Study?​ As a member you have access to the playback. It might have something that could help you out.

    Laura Gibbs
    Online Community Engagement Administrator