Under the CECL standard, institutions will have to recognize the expected lifetime losses at the time a loan or financial instrument is recorded.

The standard does not become effective for credit union Call Reports until the start of 2022.

However, subcommittee Chairman Blaine Luetkemeyer (MO-03) said he is not comfortable with the standard's requirements, which he called the most significant accounting change to the banking industry in decades.

"This rule has been done under the guise of investor protection yet applies to every single financial institution in the nation regardless of whether they are publicly traded or privately held," he said, in his opening statement. "If the purpose of CECL is to protect shareholders, it's my opinion that private firms, particularly community banks, should be exempt from this rule altogether."

"Underfunding of allowance accounts has not generally been an issue for credit unions," CUNA President/CEO Jim Nussle said in a letter to lawmakers. "Further, the typical user of a credit union's financial statements is not a public investor—such as with large, public banks—but instead is the credit union's prudential regulator, the National Credit Union Administration."

"The CECL standard is an unnecessarily complex accounting method for credit unions and only adds to mounting regulatory stress," Berger said.

But credit unions are not alone in their disgust with the CECL.

"We believe CECL should be abandoned because it is duplicative of other, more effective post-crisis capital reforms, and poses potential economic threats to consumers and small businesses, especially those in underserved segments of the market," Capitol One CFO R. Scott Blackley said, in testimony at the hearing.