NCUA Chairman Debbie Matz has told the Financial AccountingStandards Board that the group's proposed credit loss accountingstandard present safety and soundness concerns for small andmedium sized credit unions.

Matz expressed her concerns about the proposal, which industryleaders estimate could double or even triple current allowances forloan and lease losses, in a supplemental letter sent Fridayfollowing an interagency opinion that included the NCUA, FDIC,Federal Reserve Board and the Office of the Comptroller of theCurrency.

“I urge the FASB to consider the unintended consequences ofenacting financial reporting rules that may unduly impact thefinancial performance of small- and medium-sized credit unions anddiscourage these institutions from making loans to low-incomeborrowers, particularly during times of economic distress,” Matzwrote. “Since credit unions were the only federally insuredfinancial institutions to increase lending throughout the recenteconomic downturn, discouraging credit union lending wouldnegatively impact consumers going forward.”