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NCUA Launches New Resource Page
Wednesday, June 25, 2014 6:40 AM

On Friday, June 20, the National Credit Union Administration launched a new resource page on their website on interest rate risk. The page is to help credit unions understand and prepare for potential changes in interest rates and the threat to credit unions that those changes present.

NCUA Board Chairman Debbie Matz urges credit unions to use this page to their advantage.  “We are in a very unusual rate environment,” Matz said. “The credit union system is faced with extraordinary interest rate challenges. At the same time, there have been significant shifts in the composition of assets and liabilities over the past several years.”

NCUA’s YouTube Channel features a video about interest rate risk and helps credit unions answer questions. The new resource page on their website also includes charts and links to regulations and letters to credit unions, as well as interagency guidance and best practice resources.

NCUA Economist John Worth said, “A critical emerging risk is the way credit unions are using their investment portfolios. Over the past five years, credit unions' long-term investments jumped as a share of assets. In a rising rate environment, long-term investments have the potential combined with other fixed-rate assets to anchor interest income at low levels even as interest costs move higher.”