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NCUA Changes Interest Rate Risk Supervision Process
Wednesday, January 25, 2017 6:45 AM

The National Credit Union Administration issued revised guidelines for the interest rate risk (IRR) assessment and supervision process in October 2016. Some of the key components include:

  • Addition of an Interest Rate Risk Procedures Workbook;
  • Updating of risk tolerance thresholds in the Net Economic Value Supervisory Test, which includes standardized treatment of non-maturity shares;
  • Creation of an estimated net economic value tool for credit unions $50 million and under;
  • Revision of the interest rate risk chapter of the Examiner’s Guide; and
  • Elimination of the net long-term asset ratio, 17/4 test, and supervisory interest rate risk threshold (SIRRT) as adequate measures of interest rate risk.

View the NCUA Letter 16-CU-08 outlining the changes, an IRR fact sheet, the revised examiner’s guide, the IRR Review Procedures Workbook, and a guide to using the IRR Review Procedures Workbook.

Cornerstone's Deborah Rightmire, VP ALM Resources, said, "I encourage each credit union to review the information contained in this update to determine how it may impact your credit union’s process for IRR assessment."

Need information about ALM?
The mission of Asset/Liability Management (ALM) is to provide analysis, instruction, and guidance in the area of asset/liability management in order to promote the financial well-being of Cornerstone's member credit unions. ALM is the process of ensuring that a credit union remains financially viable through adequate capital, stable earnings, and sufficient liquidity. To accomplish its mission, ALM offers both dues-supported and fee-based services. For more information, please contact Deborah L. Rightmire at 800-442-5762, ext. 6496, or 469-385-6496 or