More about Brittany Stern
Brittany has more than twelve years of experience and specializing in providing audit and accounting services to financial institutions. In addition to planning, managing and performing financial statement audits for institutions ranging in total assets from $10 million to $50 billion, she has performed engagements designed to test the adequacy of loan documentation and reserves, adherence to internal control policies, outsourced internal audit, and consulting engagements for various compliance requirements.
Blog Posts by Brittany Stern:
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Reporting Loan Modifications with the Implementation of CECL
As a part of the adoption of CECL, institutions are also adopting ASU 2022-02 Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. This standard eliminates the concept of a troubled debt restructuring (TDR). As a result of this elimination, it removes the requirement to individually evaluate TDRs for impairment as CECL is already calculating lifetime losses for all loans in the portfolio. Under CECL, you are allowed to individually evaluate loans for allowance levels, but this evaluation is no longer predicated on the prior definition of an impaired loan. However, the standard did not eliminate the requirement for institutions to disclose information about loan modifications where the borrower is experiencing financial difficulty.
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CECL – Post Adoption Considerations
Over the last ten years, financial institutions have discussed and debated the Current Expected Credit Loss (CECL) accounting standard. Many of the larger financial institutions adopted the standard in 2020 with the majority of smaller, community financial institutions adopting on January 1, 2023. With adoption behind us, here are some items to consider during 2023 to position your financial institution for success in your next regulatory exam or external audit.
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As Rates Continue to Increase, So Does Refinance Risk
When with a group of senior lenders and chief credit officers recently, the question was asked – what keeps you up at night? The answer: refinance risk. Simply put, refinance risk is the risk that a borrower will not be able to refinance their existing loan at favorable terms when it becomes due which could negatively impact their ability to repay the debt.
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Best practices for Business Continuity
Depending on the organization, business continuity is something that is often considered to be more of a checklist task rather than a part of a strategic initiative. Business Continuity Planning (BCP) requires a collaborative effort of the entire organization and as a result the attention of key executives from all divisions to develop.
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Information Technology – Strategic Planning
Whether you think Information technology (IT) is a strategic asset to an organization or just a cost center that needs to be minimized, IT strategic planning at some level is necessary if the organization wants to hit its objectives more efficiently and effectively.
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NCUA Announces Change to CECL Effective Date That Helps Align Credit Unions with Accounting Standards
On July 20, 2022, the NCUA issued an Accounting Alert, superseding the alert that was issued on March 9 of the same year. This new alert states that all federal credit unions may now adopt CECL based on their audited financial reporting year if this is different from its fiscal year.
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State Pass-through Entity Tax Election – Should Your S Corporation Bank Make the Election?
With Ohio being the latest state to pass legislation allowing a pass-through entity tax (PTET) election in June 2022, nearly 30 states now allow S corporations and partnerships (pass-through entity or PTE) to be assessed an elective entity-level tax. This workaround is in response to the Tax Cuts and Jobs Act (TCJA) limiting the state and local tax (SALT) deduction for individuals who itemize to $10,000 through tax year 2025. Is it beneficial for your S corporation bank to make the PTET election?
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Unintended Consequences of Ransomware
In December of 2021, the Office of the Comptroller of Currency (OCC) stated that all Financial Institutions must have ‘robust’ systems to identify threats and vulnerabilities in their technology. The OCC went on further to state that Financial Institutions should back up key systems and records in isolation to guard against hackers looking to disrupt systems for payout.
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What You Should Know About the FTC Updates to the GLBA Standards for Safeguarding Customer Information Rule
Amendments to the Standards for Safeguarding Customer Information incorporate five key compliance changes for financial institutions. The new Rule provides additional detail to existing information security program criteria, increases accountability for program reporting, expands upon the definition of a financial institution, incorporates additional terminology definitions, and offers an exemption for smaller institutions.
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The Importance of a Risk Based Audit Plan
What is your process to create your internal audit plan? Gone are the days of pulling together an internal audit plan on the fly basing your decision on a rotational schedule, auditable areas that had the most exceptions in the previous year, or what areas may fit into your budget.