Altering the way companies evaluate impairment of financial assets, the new Current Expected Credit Loss (CECL) issued by the Financial Accounting Standards Board (FASB) is considered as one of the biggest changes ever to financial institution accounting. Under CECL, financial institutions are required to replace their current “incurred loss” model with an “expected loss” model. Additionally, lenders will need to make a projection of expected loss for each of the loans they book at the time of origination. It is new territory for many financial organizations – especially those smaller banks and credit unions that may lack the data and internal expertise to forecast losses that way.
SmartReserve™, powered by Equifax market-leading Credit Trends data, helps financial institutions of all sizes by providing access to the historical consumer credit data needed that helps to accurately forecast future losses and calculate the reserves required under the new standard.
Data can be delivered either aggregated or at the loan level, based on preference, and includes:
- Pre-recession, recession and post-recession vintages, from 2005 forward
- Monthly updates and trades linked over time to enable accurate vintage curves, updates and forecasting based on loan and consumer profiles for the life of the loan
- Multiple portfolios such as bankcard, retail cards, student loans and more
- Ability to track book of businesses across multiple segmentation items including risk score, estimated income (score based), geography and more
Smaller banks and credit unions may lack a dedicated internal analytic resource, requiring a solution that offers more than data, while larger organizations may only need the data. To address varying business needs, SmartReserve offers multiple levels of CECL support, partnering with Moody’s Analytics.
Find out today how SmartReserve can help your organization prepare for the new CECL standard.