The federal regulator of credit unions is revising its Credit Union Profile form to collect information helpful to examiners in determining federally insured credit unions’ (FICUs) exposure to LIBOR – the London Interbank Offered Rate – and their readiness to deal with its discontinuation after 2021.
The National Credit Union Administration (NCUA) says it wants to add two questions to the Profile form – Form 4501A, used to collect non-financial data relevant to regulation and supervision – that will require only “yes” or “no” answers. The agency, in a proposed information collection slated for Federal Register publication on Friday, says the information sought “is readily available” and that the agency believes “the two hours currently allotted to complete the Form 4501A is sufficient.”
“These questions are needed to identify FICU[s] that have LIBOR instruments or use LIBOR as a reference rate. Examiners will use this information to assess credit unions’ exposure, governance, risk management and readiness related to the discontinuation of the LIBOR index after 2021,” according to the Register notice.
On Wednesday, the Financial Accounting Standards Board (FASB) issued temporary guidance (expected to be finalized in early 2020) aimed at easing the process of stakeholders migrating away from LIBOR to new, replacement reference rates, such as the Secured Overnight Financing Rate (SOFR). It said the finalized guidance will address stakeholders’ operational challenges, help simplify the migration process, and reduce related costs.
The notice says NCUA will accept public comments on its proposed Profile form change for 60 days; comments would be due on or about Jan. 13.
RR: Accounting group issues temporary guidance for moving away from LIBOR to other reference rates (Nov. 13, 2019)