Are You Ready for CECL?

Advanced Analytics, Insightful Modeling and Comprehensive Data to Help You Get Compliant

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WHAT IS CURRENT EXPECTED CREDIT LOSSES (CECL)?

Current Expected Credit Losses (CECL) is a new credit loss accounting standard that was issued by the Financial Accounting Standards Board (FASB). CECL replaces the current Allowance for Loan and Lease Losses (ALLL) accounting standard, which relies on incurred losses, while CECL requires estimating expected losses over the life of loans.

IMPACT OF CECL TO FINANCIAL INSTITUTIONS

CECL is expected to have significant implications to financial institutions. The new standard will impact financial reserves and forecasts; loss models and accounting processes; and data gathering and disclosures.

VOLITILITY

Missing forecasts can drive volatility in allowances for loan losses

RESTRICTION

Excessive reserves will reduce the available capital to lend

VALUE-LOSS

Shareholder value may drop if loan loss reserves are too high

CRITICISM

Criticism from examiners and external audit firms

PENALTIES

Penalties if not compliant by the implementation date

TIME

CECL model implementations don’t happen soon enough or take too long

CHOOSE THE RIGHT MODEL FOR YOUR CECL NEEDS

Choosing the right model with the highest level of accuracy is critical to mitigating risk and having the right level of loss reserves. Black Knight has several models to help support your CECL compliance.

GET THE MOST ACCURATE LOSS FORECASTS

DETERMINE PROBABILITY OF DEFAULT/LOSS IN YOUR PORTFOLIO

PREPARE DUPLICATE FINANCIAL STATEMENTS PRE-CECL ADOPTION

PERFORM FORWARD-LOOKING ANALYSIS ON “LIKE” LOANS TO YOUR PORTFOLIO

HELP YOUR ANALYSTS CREATE WHAT-IF MODELS TO MONITOR/REFINE

Schedule a Demo to See How We Can Help You Satisfy Your CECL Data and Modeling Requirements.

WHY BLACK KNIGHT

Black Knight is the industry’s leading provider of mortgage technology, data and analytics. We have the largest deposit of loan-level historical and current mortgage data, and highly accurate modeling solutions. Our credit modeling experts can help you pre- and post-CECL adoption so your organization is ready.