Metsger highlights FSOC’s continued support for NCUA vendor authority
FSOC annual report recommendations include cybersecurity, interest rate risk
ALEXANDRIA, VA (June 22, 2016) — The Financial Stability Oversight Council’s 2016 annual report reaffirms the Council’s recommendation for granting the National Credit Union Administration authority to oversee third-party vendors, NCUA Board Chairman Rick Metsger said today.
“The credit union system is not immune to the threat of cyberattacks, including being targeted as an entry point to our increasingly linked financial system,” Metsger said. “While other federal financial institutions regulators already have third-party authority, NCUA’s lack of vendor authority with respect to cybersecurity and other threats creates a vulnerability within the financial system and limits the agency’s ability to better protect credit unions, their members and the Share Insurance Fund. We appreciate FSOC’s renewed recommendation to Congress on this important issue.”
Metsger is one of 10 voting members of the Council, which Congress created to promote market discipline, identify risks and respond to emerging threats to financial stability.
In addition to cybersecurity, the Council’s annual report, available online here, emphasizes the need for regulators and market participants to mitigate interest rate risk.
“Addressing the challenges of interest rate risk has been and continues to be a high priority for NCUA,” Metsger said. “Credit unions have made progress in this area in recent years but must remain vigilant. The Council recommends regulators and market participants continue to closely monitor and assess the heightened risks associated with reach-for-yield behavior. For our part, NCUA is in the midst of revising the way we examine for interest rate risk, and we expect that we will roll out these revised guidelines this fall.”
Since 2010, interest rate risk management has been a heightened focus for NCUA, and it is again a primary supervisory focus for the agency in 2016.
About National Credit Union Administration (NCUA)
The NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, the NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 124 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. The NCUA also protects consumers and educates the public on consumer protection and financial literacy issues.