The NCUA board of directors will consider a final rule on derivatives during the agency’s May 20 meeting. The board will also be briefed on the status of the Share Insurance Fund and issue a request for comment on the fund’s Normal Operating Level policy.
As drafted, the rule would modernize the NCUA’s derivatives rule and make it more principles-based as well as allow more flexibility for federal credit unions to manage their interest rate risk through these financial instruments.
The proposed changes include:
- eliminating the pre-approval process for federal credit unions that are complex with a Management CAMEL component rating of one or two;
- eliminating the specific product permissibility; and
- eliminating the regulatory limits on the amount of derivatives a federal credit union may purchase.
The open portion of the board meeting will begin at 12:15 p.m. and will be streamed live on NCUA’s website. Results from the meeting will be reported in the New York Minute.