ALEXANDRIA, Va. The NCUA Board is expected next week to propose a rule allowing broader use of financial derivatives, mainly interest rate swaps, options and collars.
The proposal has been kicking around NCUA for more than two years, with at least two preliminary proposals issued for public comment already.
The use of financial derivatives has been until now restricted by NCUA to corporate credit unions and a handful of natural person credit unions under a long-time pilot program.
The final rule will restrict the use of derivatives to hedging and prohibit speculative use of of the instruments.
The new rule will also set parameters for the use of derivatives, such financial health and net worth and expertise and limits on specific types of instruments.
The NCUA Board will also vote to adopt an interagency rule setting standards for appraisals on higher-price mortgage loans.
The Board will also vote on technical amendments to a variety of regulations.
