Interest Rate Risk: Seeking Member Feedback on IRR Exam Experience
The National Credit Union Administration continues to indicate that Interest Rate Risk remains a top regulatory concern. The agency has not only addressed IRR in regulation and exam focus in recent years, but IRR is also tightly woven into the proposed Risk-Based Net Worth proposal.
According to NCUA, credit unions' net holdings of long-term assets, a measure of exposure to rising interest rates, rose to an all-time high at the end of 2013 to 35.85% of total assets. NCUA leadership continues to highlight their concern over IRR in the system.
An entire page of the NCUA website is dedicated to IRR.
NCUA has already created a regulatory requirement addressing the policy and practice of interest rate risk management. The Association believes that the recent rulemaking on IRR, previous Letters to Credit Unions, credit union investments in short-term assets, and current rules which require credit unions to hold capital against potential losses position credit unions very well against IRR risk.
We want to ensure that IRR focus is not adding undue regulatory burden to our member credit unions. To do that, we need your feedback. Please click this link and take a moment to provide feedback on your most recent experience of your credit union and examiners on IRR. It remains our goal to engage regulators on this key topic prior to the issuance of any new regulation or changes in examinations as this key supervisory challenge moves forward.