The NCUA’s revised supervisory approach to interest rate risk is covered in a recent Letter to Credit Unions (16-CU-08). The new standardized approach is designed to increase focus and resources toward higher risk credit unions and minimizing the scope and time for credit unions of lower risk.
The interest rate risk supervisory review changes are effective Jan. 1.
Key changes include:
- A newly developed Interest Rate Risk Review Procedures workbook;
- Updated tolerance thresholds (low, moderate, high, and extreme) in the Net Economic Value Supervisory Test;
- A new tool that generates an estimated net economic value for credit unions with total assets of $50 million or less; and
- A revised interest rate risk chapter in NCUA’s Examiner Guide.
continue reading »