Winter is around the corner, but CECL is getting WARMer

As we near the end of 2021, choosing the right CECL solution is more paramount than ever…
While approximately 150 banks adopted CECL on January 1, 2020, almost 5,000 community banks and credit unions are still undecided about their CECL methodology or vendor partners as the 2022 parallel run window fast approaches.

In July 2021, the Federal Reserve introduced the Scaled CECL Allowance for Losses Estimator (SCALE). SCALE is a spreadsheet-based tool intended to assist community banks with total assets less than $1 billion with their CECL compliance. The SCALE tool was designed as a cost-effective alternative for smaller banks, but has proven too DIY-heavy for some institutions and left people with many questions:

  • Does the SCALE model comply with Generally Accepted Accounting Principles?
  • How do the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) view the SCALE method?
  • Can small community banks efficiently and effectively tailor “peer data” to their institution using qualitative factors?
  • Does a spreadsheet-based solution present many of the same challenges present in current practice?


The novelty of the solution leaves many of these questions unanswered. Curinos believes that the Weighted Average Remaining Maturities (WARM method remains the closest methodology to current practice for most community banks and credit unions. The WARM method is also accepted by FASB and the joint regulatory bodies as an acceptable means to comply with CECL.

We know you have several solutions to choose from and not all may be appropriate for your bank or credit union but before 2021 comes to a close and the FASB deadline gets even closer, we encourage you to decide on the right CECL solution for your institution.

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