She contended that because the agency lets its examiners evaluate the policies established by credit unions the process is too subjective, and expressed concern that examiners would use guidance in the rule as a checklist.

Under the proposed rule, federally insured credit unions with assets $10 million to $50 million would have to comply if they hold first mortgages and investments with maturities greater than five years that are equal to or greater than 100% of their net worth.

The rule would require:

• Written policies that identify people and committees responsible for reviewing the interest rate exposure.
• Appropriate actions to ensure that executives manage interest rate risks in a way that interest rate exposure is measured, monitored and controlled.
• The credit union to state how often management must report to the board.
• Risk limits based on measures such as income simulation and asset valuation.
• Tests to measure interest rate shocks.
• Periodic review of interest rate exposure.
• Assessments of the impact of any new business ventures on the credit union's interest rate risk.
• An annual evaluation of the policy.

NAFCU Associate Director of Regulatory Affairs Tessema Tefferi wrote that the rule and appendix are "appropriate and could prove useful to credit unions."

However, in his comment letter Tefferi suggested that credit unions have more than three months from the implementation date to comply.

He also noted that it would be "both effective and less costly to implement the requirements of the proposed rule if the NCUA allows credit unions to rely on third-party models in establishing their own.'

Tefferi added the agency should exclude from its calculation of first mortgage loans those that reset in five years or less and also suggested that the agency's assessments of credit union policies are "objective,'' and respect the credit union's policy decisions.