Regulatory Alerts2015-12-29 | I-15-04Complying with GAAP in Relation to MBLs and Reserving for ALLL
The Washington Department of Financial Institutions clarifies that all state-chartered credit unions must fund their allowance for loan and lease losses in accordance with GAAP, preempting conflicting state reserve requirements for member business loans. This directive mandates adherence to federal standards, including NCUA Interpretive Rulings and Accounting Bulletins, to ensure consistent risk assessment and loss provisioning. Additionally, credit unions with material member business loan portfolios are expected to implement an industry-standard commercial loan rating system for classification purposes.
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