Now CUNA has weighed in with its proposed changes to NCUA'ssuggested rules for permitting credit unions to invest inderivatives.

This follows on earlier comments from NAFCU.

Both associations agree that credit unions ought to be able touse derivatives to hedge investment risks, a policy that in broadstrokes is what the agency is proposing.

“Investing in derivatives has the potential to help many creditunions,” said Mary Dunn, CUNA deputy general counsel. “Derivativescan prove useful in managing interest rate risks. “

She added, “Often we have criticized the agency for too muchregulatory intrusion, but here we believe they are on the righttrack.”

CUNA, for its part, offered in a letter released Wednesday adetailed list of suggested changes to the NCUA proposal.

One overriding suggestion is opening up the number of approvedderivatives vendors, “which may lead to access to differentproducts and more competitive pricing for credit unions,” saidCUNA.

Among the other CUNA suggestions are:

“Instead of limiting involvement in derivatives to 250% of networth, a credit union should be able to use derivatives to hedge upto 100% of its fixed rate loan portfolio.”

”A credit union board should not have to approve eachtransaction in its day-to-day operations.”

“Well-managed credit unions of all sizes, including smallercredit unions, should have access to derivatives to hedge IRR[Interest Rate Risk] as part of their effective risk managementprogram, should they choose to engage in such activities.”