In a letter to credit unions Thursday, the NCUA said that it has revised its interest rate risk supervisory framework, and issued a supervisory letter to exam staff in an effort to increase clarity and flexibility. The agency says that the changes to the IRR supervisory framework will improve the focus of its supervision of IRR in credit unions given current market conditions.

The primary changes to the NCUA’s 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; and
• 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.

Credit union professionals can learn more about updates to the interest rate risk supervisory framework during a stakeholder webinar hosted by the agency on Thursday, September 15, at 2:30 p.m.

NCUA Chairman Todd M. Harper will provide opening remarks and staff from the Office of Examination and Insurance will explain the updates and respond to questions from attendees.

Registration for the “Interest Rate Risk Supervisory Framework Updates” webinar is open now.