ALEXANDRIA, Va.–NCUA has released an updated “simplified” tool for calculating current expected credit losses (CECL) at smaller credit unions.

According to the agency, the Simplified CECL Tool contains the latest “life-of-loan” factors (also known as the weighted average remaining maturity) factors, as well as the average three-year net charge-off rates (2022 to 2024) for each of the 13 loan portfolio categories, which in turn allows estimating credit losses for each loan portfolio category.

“For credit unions currently using the Simplified CECL Tool, the March 2025 release is provided to facilitate calculating the credit loss expense—or provision for credit losses—for the period ending March 31, 2025,” NCUA said in a statement.

For Non-Complex CUs

NCUA said the new CECL tool has been developed mostly for small and “non-complex credit unions” (assets less than $500 million) and is meant to be used as an option for estimating the allowance for credit losses on loans and leases.

“Credit unions with assets of less than $10 million may also consider using the Simplified CECL Tool, as it could provide a more accurate measure of credit losses and serve as an additional tool for loan portfolio management,” NCUA said.