Capital Briefs: Credit Union Regulator Eases Derivatives Rules

The National Credit Union Administration board adopted an interagency proposal Thursday that will make it easier for credit unions with strong risk management programs to invest in mortgage derivatives.

Effective Oct. 1, credit unions will no longer be required to test their mortgage-backed securities for sensitivity to wide interest rate swings. NCUA and other regulators feared the test was causing some institutions to abandon these products in favor of less-restrictive yet similarly risky investments, such as structured notes. As of December only 921 credit unions reported investing in mortgage-back securities.-Scott Barancik

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