Another Sort Of Larry... Interest Rate Risk (IRR)

Be wary of a larry!

Mr. Larry Fazio in his testimony before Congress last week said the following:

"NCUA's focus on interest rate risk [IRR] management has been constant and pronounced for more than 15 years, as evidenced by a steady issuance of guidance to examiners and credit unions on asset-liability management. Since 2010, interest rate risk management has been a heightened focus for NCUA, and it is a primary supervisory focus for the agency again in 2015."

No one working around credit unions was surprised that IRR has been on NCUA's mind for quite a while, that's irrefutable.  No one should be surprised that IRR is a "primary supervisory focus" for 2015, a focus that most think now approaches irrationality.  

15 years
of IRR leadership.

But, what was a bit of a surprise was that Mr. Fazio and the NCUA don't seem to understand that despite a "constant and pronounced focus for 15 years" and a "heightened focus" since 2010"; that their efforts - "as evidenced by a steady issuance of guidance" - have produced the worst two IRR disasters in CU history - the Corporate collapse of 2009, which bankrupted the Share Insurance Fund, and the much more recent, but equally bad 2014 display of IRR non-acuity, RBC #1 !

Folks are
IRR-ked!

It should not be too difficult for NCUA to see why Congress, credit unions,  credit union members, and a whole host of other CU "stakeholders" have grown increasingly irritable about what appears to be an  irreversible agency adventure in IRR irresponsibility.

There does come a point when the Agency's reputation and credibility become irretrievable and its purpose as "an independent agency" becomes...

... and that's no larry!