The Financial Accounting Standards Board will meet soon to discern implementation issues associated with its credit losses standard, but consideration of a deferral in the effective date is not on the agenda.

In an upcoming routine meeting, the board has teed up a session to review implementation concerns associated with Accounting Standards Codification Topic 326 on financial instruments, which is the standard taking effect Jan. 1, 2020, for public companies requiring a “current expected credit losses” approach to recognizing loan losses. The board plans to address concerns raised during the most recent meeting of the board’s Transition Resource Group on credit losses, which is fielding and answering technical questions from entities as they prepare to adopt the new accounting.

A FASB spokesman said the board “will discuss the feedback received on the issues discussed” at the most recent TRG meeting, where the group addressed extensions and measurement inputs for contractual terms, vintage disclosures for revolving loans, and recoveries. She could not say what activity, if any, may be under way at the FASB to answer increasing calls to delay the effective date of the standard.

The American Bankers Association and the Banking Policy Institute, which represent virtually all major banks in the United States, have called on the U.S. Treasury to intervene on CECL. As banks are refining and testing their CECL models to determine when and in what amounts to recognize loan losses in financial statements, they are growing concerned that the new accounting will produce “procyclicality” in the economy or cause any kind of economic downturn that might occur to snowball.

Bankers say their models indicate the loss reserves in specific portfolios will expand dramatically under the new accounting, which will force banks to take more conservative lending positions with specific borrowers to reduce the losses they must report. That will make loans for certain borrowers harder to get during a downturn, which will push the economy faster into a downward spiral, they say. The financial services sector was hopeful banking regulators would recalibrate regulatory capital requirements to reflect the new accounting, but their response so far is only to propose a phase-in period for the GAAP-based reserve requirements.

Financial institutions have appealed to Treasury to launch a study of the economic effects of CECL and to compel the FASB to delay the effective date pending the outcome of such a study. FASB Chairman Russ Golden acknowledged the call for delay and said he would respond in writing “in due course.”