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NCUA Derivatives Details Discussed In CUNA Audio Conference
WASHINGTON (6/6/13)--The National Credit Union Administration's recently released derivatives proposal was one of many topics discussed by Credit Union National Association staff during a "Pressing Regulatory and Compliance Issues Audio Conference" held last week.

CUNA is particularly interested in how the proposal would address the use of outside vendors and how fees collected by the agency would be spent. CUNA in recent meetings with the agency has also asked the NCUA how existing staffing levels would be adjusted to deal with derivatives supervision.

The NCUA derivatives proposal, released at the May open board meeting, would allow well-run federal credit unions to use simple derivatives to hedge against interest rate risks. The NCUA plan would allow only well-managed credit unions with $250 million or more in assets, and which have appropriate expertise, to apply for an agency derivatives investment program. Swaps and caps will be the only approved investments. Fees will be charged to cover costs related to application processing and supervision of the program.

Around 75 to 150 credit unions would apply for derivatives authority within the first two years of the program, the NCUA has estimated. The agency said it would need to add new resources to handle application processing and supervision if the program is approved.

CUNA staff during the conference said the NCUA kept the derivatives proposal simple to release it in a more timely fashion. The agency is particularly interested in credit union comments on fees and asset level cutoffs, CUNA staff said.

The audio conference also featured:
  • An update on U.S. Congress tax discussions;
  • The latest on Consumer Financial Protection Bureau regulatory actions; and
  • Discussion of other key legislative and regulatory topics.
An archived version of the conference will be released later this week.
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