Specifically, Becker said in the letter he sent Friday that members have reported examiners requiring credit unions to set policies according to rate shocks outlined in a 16-year-old core deposit study.

“The examiners then suggested the members initiate drastic balance sheet restructuring that would necessitate selling large portions of the long-term (three years or longer) investments and long-term (five years or longer) loans and shift those dollars into very short term and/or floating-rate loan and investment products without regard to current economic forecasts that expect rates to remain at current low levels for another one to three years,” Becker said in the letter.

To do so, many credit unions would have to curtail their long term lending and much of their member business lending, he said. Shifting assets this way into very short term products would drastically reduce net interest margins, thereby reducing net income and the member's net worth, which Becker said would seem to be counter-productive to the overall goals of the NCUA.

Instead, he said, credit unions should have the flexibility to determine appropriate testing and modeling based on industry-accepted standards and expert advice from qualified third-party vendors.

And, NAFCU suggests the NCUA provide clearer interest rate risk guidance to examiners, emphasizing that each credit union's situation is unique, and the models, assumptions and testing it employs should be commensurate with its portfolio.