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Matz: FSOC Recommendations Have Direct Bearing on Credit Unions

​Top Priorities Include Interest Rate Risk, Capital and Liquidity Standards, Cyber-security

ALEXANDRIA, Va. (April 26, 2013) – National Credit Union Administration Board Chairman Debbie Matz made the following statement following the release of the Financial Stability Oversight Council’s 2013 Annual Report:  http://www.treasury.gov/initiatives/fsoc/studies-reports/Pages/2013-Annual-Report.aspx.

“I want to take a moment to join the other members in expressing my thanks to the FSOC staff and the staffs of the member agencies for their hard work on this report. Each year as part of the Annual Report process, we sign the report and attest to the member statement. That statement makes it clear these recommendations are actions we believe need to be taken to ensure financial stability and to mitigate systemic risk. 

“As the supervisor and insurer of the credit union system, NCUA takes these recommendations and the analysis of emerging risks very seriously. A number of the risks identified and recommendations are consistent with our regulatory and supervisory priorities, and the report reinforces and reaffirms the critical nature of these priorities. Every recommendation in this report is meaningful to the credit union industry; because financial stability and a healthy, growing economy are critical to the success of the industry.

“Three recommendations in particular have direct bearing on credit unions:

  • The first is risks arising from a prolonged period of low interest rates, including duration extension and the possibility of credit risk-taking. Over the last several years, many credit unions have increased exposure to fixed-rate real estate and longer-term investments. The Council recommends that regulatory agencies continue their scrutiny of how potential changes in interest rates could adversely affect risk profiles, and this is a priority for NCUA.

  • Second, the report emphasizes that capital and liquidity buffers ‘form the most fundamental protection for the broader financial system.’ This is equally true in the credit union sector.  We continue to evaluate capital and liquidity standards to make sure they are appropriate for a growing and evolving credit union industry.

  • Finally, operational risks, including cyber-security risks, are an emerging and rapidly changing threat. Credit unions are not immune to this threat, and this will be an area of continued emphasis and guidance.

“One of the under-appreciated benefits of FSOC is that the process of working together on projects like the Annual Report has strengthened ties between FSOC member agencies and organizations, increased collaboration, and created new and beneficial lines of communication and venues to discuss views on new and emerging risks. I look forward to continued discussion and collaboration.”

Matz is one of 10 voting members of the Financial Stability Oversight Council.



NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the U.S. Government, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 97 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. At MyCreditUnion.gov and Pocket Cents, NCUA also educates the public on consumer protection and financial literacy issues..

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