Group Representing Smaller CUs Calls on National Trade Groups to Make CECL Relief a ‘Top Priority’

KENNEWICK, Wash.–The Endangered Small Credit Union Defense (ESCUD) is calling on America’s Credit Unions, the Defense Credit Union Council, state leagues, and other credit union trade associations to make legislative relief from CECL for small credit unions under $500 million in assets a “top advocacy priority” for the remainder of 2026 and into 2027.

In a letter sent today to the leadership of those organizations, ESCUD President Doug Wadsworth emphasized that the organization is seeking to serve as a constructive partner in the effort.

According to ESCUD’s January 2026 survey of small credit union CEOs (75% of which lead institutions under $100 million in assets) CECL ranks as the highest-priority regulatory burden facing smaller credit unions. Survey respondents placed it ahead of BSA compliance, examiner over-compliance pressure, and examination exhaustion, ESCUD said.

CECL Not Designed for Smaller CUs

In a statement, Wadsworth said that the historical loss method worked effectively for small credit unions for decades, providing adequate reserves for their low-risk, stable loan portfolios. 

“CECL, by contrast, was designed for large, complex financial institutions and delivers little practical value to smaller, relationship-based lenders,” according to Wadsworth, who is president and CEO of Tri-Cities Community FCU in Washington.

ESCUD noted the current statutory exemption applies only to credit unions under $10 million in assets. The organization said that small institutions report have found NCUA’s Simplified CECL Tool often requires higher reserve levels than either the full CECL calculation or the prior incurred-loss methodology, and that others have found it more economical to pay third-party vendors than to use the free tool,

Meanwhile, state-chartered credit unions are frequently required to maintain two separate calculations, ESCUD said.

‘Consumes Time & Money’

“These realities consume time, money, and management attention that small credit unions could otherwise direct toward serving members and strengthening their communities,” the letter states.

ESCUD said it is positioning itself as a supportive resource for trade association advocacy teams, and that it is has committed to gathering additional data and real-world examples demonstrating the compliance costs and higher allowance requirements small credit unions are experiencing under CECL, to help support the large trade association advocacy efforts.  

“We believe this is an area where a united industry voice — large and small credit unions working together — can achieve real progress,” Wadsworth added.

A Specific Ask

The letter specifically asks trade associations to pursue legislation in the current or next Congress that would raise the CECL exemption threshold for credit unions to at least $500 million in assets, while even coordinating with banking trade groups where appropriate.

ESCUD said it has now been formally endorsed by more than 32 small credit unions nationwide, representing more than 100,000 members and more than $1 billion in combined assets.

Wadsworth is encouraging trade association leaders and advocacy staff interested in partnering on the CECL legislative effort or receiving additional data from ESCUD to contact him at [email protected] or 509-735-8331 x100.