NAFCU President/CEO Fred Becker has fired off a letter to theNCUA Board urging the regulator to take immediate action regardingexaminers using their own opinions and methods when shock testing credit union balancesheets for interest rate risk.
“They're substituting their own opinions for those of themanagement of the credit union, as well as the expert advice theyare getting from very well-qualified third parties,” Becker said ofthe feedback NAFCU has received from its members. “The examiner isnot responsible for running the credit union. That's for the boardand management to do.”
Becker said he's heard reports of examiners shock testing forinterest rate risk under “absurd” scenarios, such as unrealisticincreases in rates over a six-month period.
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