ALEXANDRIA, Va.--Tim Segerson, deputy director of NCUA's Office of Examination and Insurance, explained that the Sept. 30 deadline to have a written policy and program on interest-rate risk management in place includes deposit strategies. He emphasized that CUs need to figure out what are their core, stable deposit funding sources, which allow them to better assess what their mismatches are between their funding sources and the assets they carry.
"It is critical for credit unions to have a really good understanding of how their shares will behave," said Segerson. "I have seen models in credit unions where they change their assumptions even slightly and go from having minimal risk to significant risk because of the impact of those funds. The larger institutions are more diverse so those share accounts have less of an impact. But in medium and smaller institutions (the impact of shares) is greater and that always presents a big challenge.
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