The American Bankers Association is pointing to comment letters filed by the Big Four accounting firms and Grant Thornton expressing opposition to the Financial Accounting Standards Board’s proposals to force banks to report their loans at fair value.

The ABA noted that Ernst & Young had filed a comment letter on Friday with the board on its proposed financial instruments standards, in which the firm said, “Specifically, we do not support requiring financial institutions (and other entities with similar investments) to report loans at fair value when those loans are held for the collection of contractual cash flows. In these circumstances, we believe loans should be eligible for measurement at amortized cost."

The ABA also noted that Art Lindo, chief accountant of the Federal Reserve, took issue with the fair value portion of FASB’s financial instruments proposal during an AICPA banking conference on Monday afternoon.

“We do not support the use of FV-OCI for instruments held for collection or payment purposes,” he said, according to the ABA. “We support improved disclosure of fair value information in the footnotes to financial statements.”

Those comments join earlier comment letters filed by PricewaterhouseCoopers, Deloitte, KPMG and Grant Thornton expressing reservations about the proposals in varying degrees.

The PwC letter, for example, noted, “We recommend use of a mixed measurement model consisting of amortized cost and fair value. We believe that amortized cost - not fair value - is the appropriate measurement attribute when an entity's business strategy is to hold financial instruments for collection or payment of contractual cash flows, and therefore provides more decision useful information for investors and other financial statement users. We agree, however, that fair value information is also useful when amortized cost is the measurement attribute and would support prominent disclosure of fair value information, at a minimum, on a disaggregated basis in the footnotes.”

As more comment letters pour in to FASB’s website, the prospects for loans being treated at fair value may be dimming, especially with the abrupt retirement of FASB Chairman Robert Herz, who was a major proponent of treating the loans at fair value. His replacement, acting chairman Leslie Seidman, is reportedly more supportive of treating the loans at amortized cost. Her leadership of the board, combined with the united opposition of the major firms, may be enough to tip the balance in the banks’ favor.