ALM First, which conducted the NCUA’s derivatives pilot program, will host a webinar on the new regulation. The free event is open to any credit union and is scheduled for 10:30 a.m. Central Time on Thursday, Feb. 20.
Partner Emily Hollis, CFA, an expert in asset liability management, will lead the one-hour session, which will focus on how to enhance investment programs under the rule. The webinar will also include a Q&A session.
“Derivatives can serve as a valuable tool for some credit unions, offsetting the interest rate risk that is inherent in today’s financial environment,” Hollis said. “When used properly, derivatives allow eligible credit unions to compete more effectively, but their restrictions and guidelines must be understood and followed.”
ALM First is currently the only organization that has approved derivative credit union clients, according to a release from the firm. The ruling limits derivative use to federally regulated credit unions with assets over $250 million, a CAMEL rating of 1, 2 or 3 and a management rating of 1 or 2.
The new rule added interest rate swaps, purchased interest rate caps, purchased interest rate floors and Treasury note futures to investment authorities for qualified credit unions.
“Derivatives authority is beneficial to the credit union industry, but using them effectively requires education and preparation,” Hollis said. “This webinar will examine how credit unions can operate under the ruling and underscore its guidelines.”
Registration is available online.