TransUnion teams with EXL for CECL compliance
Credit reporting agency and risk solutions provider TransUnion is taking steps to help lenders to comply with the new current expected credit loss (CECL) accounting rule. The company is partnering with operations management and analytics company EXL to facilitate the change, reports Julie Muhn at Finovate.
The partnership will allow TransUnion to create a CECL Credit Loss Calculator to help lenders forecast losses under CECL, since the new guidelines change the methodology used to calculate loan loss allowances.
The tool combines EXL’s analytics capabilities with TransUnion’s de-personalised credit data to create a platform that complies with all CECL reporting guidelines, which alter how banks calculate loan loss.
“Many players in the industry are describing CECL as the biggest change to bank accounting standards in years,” says Jason Laky, SVP and consumer lending business leader at TransUnion. “While large banks have more resources at their disposal to adapt, we believe the majority of small to mid-sized lenders will not have the ability or capacity to comply internally and may face challenges as they prepare for the roll-out of this new rule.”
Using the Credit Loss Calculator, lenders can leverage their own portfolio data or import data reported by TransUnion. The tool allows lenders to adjust for macroeconomic scenarios, apply overlays, and adjust the models for different credit products, including mortgages, auto loans, and revolving credit.
Founded in 1968, TransUnion is headquartered in Chicago, Illinois with office locations in Hong Kong, Mumbai, Toronto, Johannesburg, Colombia, and Brazil. Last month, the company acquired device intelligence firm iovation.
TransUnion is a public company with a market capitalisation of $13.4 billion.