Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
CUNA: Derivatives Plan Concerns Include Fee Structure
WASHINGTON (5/29/13)--While it considers it a positive that the National Credit Union Administration is seeking comment on a proposal to allow eligible credit unions to use simple derivatives to hedge against interest rate risks, the Credit Union National Association says concerns with the proposal are surfacing.

In its May 28 issues of the CUNA Regulatory Advocacy Report, CUNA says the hottest issue surrounding the proposal right now is whether only those who want to participate in the program should bear the costs of applications and the supervision and examination costs associated with it.

"One of the concerns about the possible fees is that such a requirement could set a precedent for a new fee structure from NCUA for other new authority or services that a credit union is permitted to do if NCUA concludes the activity introduces more risk to the National Credit Union Share Insurance Fund," the CUNA  publication notes.

CUNA also notes that restrictions, such as a limit on notational value at 100% of net worth for a Level I credit union and 250% for a Level II credit union, as well as interest rate and maturity caps, have also raised concerns.

CUNA's Examination and Supervision Subcommittee already has had a first meeting with the NCUA to discuss issues associated with the derivatives proposal.  Comments will be due to the agency in early July.

Use the resource links to read the entire issue of the CUNA Regulatory Advocacy Report (members only), and to access more information on the NCUA derivatives plan.
Other Resources

CUNA Reg Advocacy Reports
RSS print
News Now LiveWire
Thanks for following our tweets on the NCUA's #listeningsession.
13 hours ago
RT @IllinoisLeague: Mike Daugherty, CEO, Community Plus FCU: I'd like to you to reconsider your repeated 'No's' #listeningsession #fixRBC h…
15 hours ago
CU says definition of complex CU needs to be reviewed, and not just based on asset size. NCUA: We are looking at that. #listeningsession
15 hours ago
NCUA says lots of resources go 2 examiner training,but there's much turnover.Invites ideas on how to improve exam training.#listeningsession
15 hours ago
CU tells NCUA that more benefit could be gained by better examiner training than imposing this "unnecessary" RBC system at #listeningsession
15 hours ago