The Securities and Exchange Commission may be hands-off with respect to the pending credit losses standard, but the House Financial Services Committee is holding a hearing on the expected effect of the accounting change on the economy.

The House committee is convening experts from Capital One Financial Corp., Moody’s Analytics, Stieven Capital Advisors, and the newly formed Bank Policy Institute to hear their views on how Accounting Standards Codification Topic 326 will affect financial institutions and the economy. The hearing will explore “the availability and affordability of credit as well as the potential burden on financial institutions” resulting from the new standard, according to a memo to staff.

The “current expected credit losses” standard requires companies to take a more forward-looking approach to estimating and reserving for losses in their lending portfolios, beginning with calendar-year public companies on Jan. 1, 2020. Companies must establish an upfront estimate of their life-of-loan losses and recognize them at the inception of new instruments, even when loans are fully performing. That’s a big change from the current incurred-loss model, where companies are prohibited from recognizing losses until they are almost assured.

The Banking Policy Institute presented a letter to the U.S. Treasury and members of Congress asking for a study of CECL’s effects and a delay in the effective date. The American Bankers Association chimed in with a similar request, and another banking group asked the board to reconsider CECL’s effect on the income statement.

Banks finalizing their CECL models and preparing to run them parallel to their current accounting in 2019 have reported the new accounting will produce economic consequences. They say financial institutions will face incentives to get more conservative with lending, especially at the outset of any downturn, which will reduce lending and fuel the downward spiral.

The Financial Accounting Standards Board finalized the new standard in 2016 after years of public consultations. The board acknowledged the request for a delay but has not formally answered it. The board’s vice chairman, Jim Kroeker, gave companies no reason to hope that the board would delay implementation or open the major provisions of the standard for reconsideration.

SEC Chairman Jay Clayton had nothing to say about the possibility of a CECL delay when questioned at a national accounting conference. “It’s in the hands of the standard setters,” he said. SEC Chief Accountant Wes Bricker earlier voiced his support for FASB as the independent standard setter, both in its development of the standard and now in its response to calls for change or delay to the standard.

The Financial Accounting Foundation will observe the House committee hearing, according to a FASB spokesman. “The FASB continues to work with the banks and the banking regulators to ensure a smooth implementation of the credit losses standard,” she said.