LAS VEGAS — NCUA Chairman Debbie Matz announced Wednesday thatthe agency plans to propose a rule that would eliminate the 5% capon fixed assets at the upcoming board meeting.

“The proposal would cut the red tape and streamline the processfor federal credit unions to occupy land or buildings. Our intentis to allow federal credit unions to manage their own fixed-assetpurchases without having to seek permission or waivers from NCUA,”Matz said in her prepared remarks for NAFCU's Annual Conference.

“When you want to update your facilities, upgrade technology, ormake other purchases that have no impact on safety and soundness,NCUA should not micro-manage your individual business decisions,”she also said.

Matz reminded credit unions that NCUA examiners are checking tosee how credit unions are executing risk-mitigation controls tobetter protect, monitor, and recover from cyberattacks.

“This is part of a nationwide effort to safeguard our systemsand protect against attacks by cyber-terrorists, as well as hackerswho are after cash in your members' accounts,” she said. “Iencourage all of you to get educated and share best practices witheach other.”

Next to cybersecurity, the NCUA's top supervisory priority isinterest rate risk.

“Credit unions cannot afford to ignore this increasingly seriousrisk, because ignoring rising rates is like pitching a tent on abeach at low tide,” Matz said.

“You don't want to pitch your portfolio's tent in a low-rateenvironment when rates are rising above historic lows, and marketexperts are warning that as rates rise, they may rise quickly,” sheadded.

Matz expressed concern over some credit union officialssuggesting that interest rate risk is no longer an issue.

“A few even suggested that short-term rates will continue tohold at record lows, because they haven't risen yet,” she said.

Matz showed a graph that said $2.7 billion swung to unrealizedlosses of $2.4 billion in one year.

“The number of credit unions with unrealized losses on assetsavailable-for-sale has quadrupled. So, I think you can understandour concern,” she said.

Matz also told credit unions the agency is in the process ofrevising the risk-based capital proposal.

“We're not saying credit unions can't take on assets thatpromise greater returns in exchange for greater risk. We're justsaying that if you do, you need to hold appropriate capital,” shesaid.

“We have already identified five candidates for revised riskweights. They include investments, mortgages, member businessloans, credit union service organizations and corporates.”