Interest Rate Risk Policy and Program Frequently Asked Questions


1775 Duke Street, Alexandria, VA 22314

DATE: August 2012
LETTER No.: 12-CU-11
TO: Federally Insured Credit Unions
SUBJ: Interest Rate Risk Policy and Program Frequently Asked Questions

Dear Board of Directors and Chief Executive Officers:

Beginning September 30, 2012, certain federally insured credit unions will be required to have a written policy on interest rate risk (IRR) management and a program to implement this effectively.1

We have hosted or participated in four webinars since the issuance of Letter to Credit Unions 12-CU-05 in which we discussed the new interest rate risk rule. In these webinars, we addressed concerns and questions with examiners and federally insured credit unions (FICUs), following the approval of the rule. This Letter answers the most frequently asked questions to facilitate clear and open communication on this subject.

In Letter 12-CU-05, we noted that NCUA and other financial regulators issued guidance in the past on the management of IRR. NCUA also previously issued a number of Letters to Credit Unions on subject areas concerning IRR.2 We encourage you to review these as you evaluate your credit union’s IRR policy and program. When the rule becomes effective, on September 30, 2012, examiners will use the new examination questionnaire we distributed in Letter 12-CU-05. The questionnaire conforms to Appendix B of the IRR Rule and you should consider the guidance this provides to examiners as you evaluate the credit union’s policies and program.3

We encourage you to discuss any questions you have with your examiners, as you implement this important rule at your credit union.

Interest Rate Risk Rule 741.3(b)(5): Frequently Asked Questions

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