Letter to FASB on Exposure Draft Proposing Uniform Treatment of Repurchase Agreements
March 28, 2013
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 firstname.lastname@example.org or (703) 842-2234 or Angela Meyster, NAFCU’s Regulatory Affairs Counsel at email@example.com or (703) 842-2272.
Carrie R. Hunt
General Counsel and Vice President of Regulatory Affairs