Onsite Coverage: NCUA Proposes Expanding Access to Derivatives for FCUs
ALEXANDRIA, Va. — More FCUs might make use of derivatives as a means of protecting against interest-rate risk under a proposed rule the NCUA sent out for comment on Friday.
The agency would allow FCUs that demonstrate strong financial performance and show they have the staff expertise to make use of derivatives on a limited basis.
It is seeking comment on whether to mandate that credit unions third-party providers or to let them do it thenselves. FCUs couldn't trade in derivatives for purposes of speculation.
The agency is seeking input about the amount of approval that would be required.
Currently the NCUA allows FCUs to trade in derivatives through pilot programs that the agency must preapprove. There are FCUs that have outstanding derivative contracts.
There is a 60-day comment period on the proposed rule.