The NCUA Board Friday indicated it is working on narrowing down potential parameters under which it may authorize federal credit unions to independently engage in certain derivatives transactions aimed at offsetting mortgage-related risks caused by rate spikes and volatility.
The board of the National Credit Union Administration said in an advanced notice of proposed rulemaking published in the Federal Register, that it would be accepting comments on the issue through April 3.
The NCUA board wants to know if FCUs seeking this authorization should demonstrate a material IRR exposure or other evident risk management need before getting independent derivatives authority, whether it is appropriate to require minimum performance levels when considering whether to grant this authority, and what the minimum kind and amount of derivatives experience and expertise an FCU's staff should demonstrate before receiving this authority.
The new ANPR is a follow-up to one issued in June of last year.
