NCUA publishes IRR guidance

Posted: Sep 7, 2022 | Author: Cornerstone League

advocacy compliance CUNA government relations IRR NCUA supervisory letter

The National Credit Union Administration issued a Supervisory Letter to update the agency’s interest rate risk supervisory framework. The primary changes to the supervisory framework are:

Revising the risk classifications by eliminating the extreme risk classification and modifying the high-risk classification.
Clarifying when a Document of Resolution to address IRR is warranted, including removing any presumed need for a DOR based on an IRR supervisory risk classification and related need for a credit union to develop a de-risking plan.
Providing examiners more flexibility in assigning IRR supervisory risk ratings.
Revising examination procedures to incorporate updated review steps when assessing how a credit union’s management of IRR is adapting to changes in the economic and interest rate environment.

The NCUA update follows an Aug. 4, 2022, letter from CUNA urging the agency to take action to address several issues with the NEV Supervisory Test.