Video: NCUA Posts Interest Rate Risk Resource Page & Video Posted by AVCU on 10:39 AM

Earlier this month the National Credit Union Administration launched a new resource page on interest rate risk to help credit unions understand and prepare for potential changes in interest rates and the threat to credit unions that those changes present.The new resource page on their website also includes charts and links to regulations and letters to credit unions, as well as inter-agency guidance and best practice resources.

“We are in a very unusual rate environment,” according to NCUA Board Chair Debbie Matz. “The credit union system is faced with extraordinary interest rate challenges. At the same time, there have been significant shifts in the composition of assets and liabilities over the past several years.”

Additionally, NCUA Economist John Worth explains current interest rate risk issues in the video below. His explanation is especially suitable for board members and others not dealing with the issue regularly. In the video, Worth says “Over the past five years, credit unions' long-term investments jumped as a share of assets. In a rising rate environment, long-term investments have the potential combined with other fixed-rate assets to anchor interest income at low levels even as interest costs move higher.”

Find NCUA's Interest Rate Risk Resource page here.