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Letter to FASB on Exposure Draft Proposing Uniform Treatment of Repurchase Agreements

March 28, 2013

Technical Director

File Reference No. 2013-210

Financial Accounting Standards Board

401 Merritt 7

PO Box 5116

Norwalk, CT 06856-5116
RE:      File Reference No. 2013-210;

Exposure Draft – Effective Control for Transfers with Forward Agreements to Repurchase Assets and Accounting for Repurchase Financings

Dear Sir or Madam:

On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association  that  exclusively  represents  federal  credit  unions,  I  write  to  you  regarding  the Financial Accounting Standards Board’s (FASB) exposure draft proposing uniform treatment of repurchase agreements and similar securities lending transactions.  The exposure draft, generally, seeks to require secured borrowing treatment for certain repurchase agreements and securities lending transactions where the transferor maintains effective control of the financial asset transferred.  The proposal also provides additional guidance for determining when transferors maintain such effective control.

NAFCU suggests providing additional examples for the effective control test to assist entities in determining whether particular transactions fall within the scope of the test.  This is especially necessary given the rapid pace at which new types of products, entities, and transactions become a part of the financial marketplace.

NAFCU appreciates FASB’s efforts to provide additional clarity on the treatment of repurchase transactions. However, in proposing new accounting standard updates, NAFCU urges FASB to take into account the unique structure of credit unions as member-owned not-for-profit cooperative entities. Credit unions are motivated by meeting their members’ needs and providing quality service, not by profit.  Standards geared towards publicly-held entities are often inapplicable or extremely difficult and costly to apply to credit unions.

NAFCU appreciates the opportunity to provide our comments.  Should you have any questions or concerns, please feel free to contact me at chunt@nafcu.org or (703) 842-2234 or Angela Meyster, NAFCU’s Regulatory Affairs Counsel at ameyster@nafcu.org or (703) 842-2272.

Sincerely,

Carrie R. Hunt
General Counsel and Vice President of Regulatory Affairs

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