"The idea behind CECL is being able to predict or forecast what the life cycle of that loan will look like from the very inception," said Shawn Kisana, SVP/CFO of the West Jordan, Utah-based Member Business Lending, a CUSO that provides loan support services.

Making those estimates starts with amassing a considerable amount of historical data, such as risk rating by individual loan, loan durations, individual loan balances, individual loan charge-offs and recoveries, and individual loan segmentation. Once the historical information is in place, credit unions can use it to take the next big step: Creating a model that accurately calculates expected losses.

Suncoast Credit Union EVP/CFO Julie Renderos, who's had her eye on CECL since 2012, said gathering all that data can be a huge undertaking. Even the Tampa, Fla.-based Suncoast, which has $7.3 billion in assets and 698,000 members, has had a hard time with some of it, she said. When the proposed rules first came out, Renderos realized there was no way to pull a vintage report on the credit union's first mortgages, for example. Suncoast had to reengineer its data collection, she said.

"We knew that we had information that came from our core system, we had information that came from the credit bureaus, we had credit cards on a separate system," she said. "We had to pull all of this data into one data warehouse."

Credit unions need to start collecting historical loan-level data immediately, she said, but there is a light at the end of the tunnel.

"It just took a lot of time to get there," she said. "Now that we have it built, it's a lot easier because we have the data and it's a report and we run the report. The up-front is going to take a considerable amount of time. I think it's going to vary by credit union depending on how easy your data is to access electronically."

She added, "Start now, because if you go through a core conversion, you might lose some of that data."

2. Form a team

Credit unions' preparation work should also include forming CECL committees, said Aaron Lenhart, a senior risk management consultant at Sageworks, which provides financial analysis software and runs ALLL.com.

"Bring these folks together and understand how this is going to potentially impact you so that you can hopefully lay the foundation for some of these processes that are going to make life a little bit easier, [or] at least the transition a little bit easier," he said.

Be wary of spending a lot of money on consultants right now, Renderos added.

"We don't know what that final rule is going to be," she said. "I've seen a lot of consultants out there trying to sell products, and right now it just doesn't seem like that's the highest priority."

3. Re-evaluate IT budgets

Amassing piles of data from a lot of different sources will likely require a data warehouse and analytics tools – without those things, you're signing up for a very manual process, Renderos cautioned. But warehouses, software and the people to manage them cost money; credit unions shouldn't overlook that in their CECL preparations.

"We had to hire someone to manage that data warehouse," she said. "Now we have a staff of people who do that, and they run reports and write reports off of that data warehouse. Every day they're pulling in data from all these data sources to get them all into one repository."

Whether to build data collection and analysis tools in-house or go with a third-party provider is a question more credit unions will undoubtedly face. Small credit unions may have an especially tough choice, Kisana noted, because on one hand, they may be simpler organizations that could justify developing their own analytics and models in-house; on the other hand, they just might not have the human or financial capacity.

Either way, developing, connecting and monitoring data sources and models will probably be the most expensive part of CECL preparation, he said.

4. Don't panic

FASB originally proposed that CECL take effect for fiscal years beginning after Dec. 15, 2019 for credit unions and other nonpublic business organizations. However, in April it pushed things back a year, announcing that the rules will now take effect for annual periods beginning after Dec. 15, 2020, and interim periods within fiscal years beginning after Dec. 15, 2021. For public companies that file with the Securities and Exchange Commission, the rules will be effective for fiscal years beginning after Dec. 15, 2019. All entities can adopt the rules for fiscal years beginning after Dec. 15, 2018.

"It's human nature to wait until that last moment, and so a lot of credit unions are probably not acting on [CECL preparation], because, well, 2019 is pretty far out," Kisana said. "There are probably a lot of credit unions that are behind."

But credit unions that haven't done much about CECL shouldn't freak out – yet, according to Lenhart.

Credit unions should spend 2016 creating a committee and a game plan, he said. In 2017 and 2018, they should create their models and start testing scenarios. By 2019, he noted, credit unions should have a final model that they've spent time validating.

"Just because we say don't panic, that doesn't mean don't prepare," he said.