It should be no surprise that regulators and industry executivesare concerned about the potential for interest rate risk exposurebuilding on the credit union industry's balance sheet. We are allaware that credit unions have evolved to meet the needs of members,providing more-complicated products and services while alsoutilizing funding sources and investments which have also increasedin complexity.

The complexity of investment and funding products availabletoday means there are more opportunities for increased interestrisk exposure despite holding sufficient levels of short-termliquidity. The current low interest rate environment intensifiesconcerns regarding the issue as credit union officials grapple withrelatively low rates of return on their investments.