Compliance Question of the Week

Which credit unions does the NCUA require to have interest rate risk policies?

The National Credit Union Administration (NCUA) rules regarding interest rate risk (IRR) policies require all credit unions with more than $50 million in assets to have IRR policies.

Credit unions below $10 million in assets are not required to adopt an IRR policy.

Credit unions between $10 million and $50 million in assets are required to adopt an IRR policy if they have significant IRR concentration. Credit unions can rely on the Supervisory Interest Rate Risk Threshold (SIRRT) calculation to determine if the credit union will need to develop an IRR policy.

The SIRRT calculation is (Total first mortgages held + Total Investments with maturities greater than 5 years) / Total Net Worth. If the SIRRT ratio equals to or exceeds 100 percent of the net worth, the credit union in this asset range will need to adopt an IRR policy.

Interested in learning more?

John Myers of c. myers will be leading two Asset/Liability Management (ALM) trainings in Oregon and Washington in March, including one in Tigard, Ore., March 12-13, and another in Spokane, Wash., March 15-16. The trainings will specifically include strategies and information to help credit unions comply with the new NCUA ALM regulation, lending a sense of urgency and timeliness to the seminars.

Related Links
12 CFR part 741

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

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