McGlone worked in investment banking before joining the Affinity executive team in 2007, and was previously chief financial officer and executive vice president of Sallie Mae where she managed a large derivatives program.

She questioned the NCUA's estimated costs presented with the rule, which included between $3.8 million and $6.5 million for contractors and an additional six to 12 full time equivalent employees to assist with exams.

Given the simplicity of the derivatives swaps and caps proposed, and the NCUA's expertise particularly in its capital markets division, McGlone said she's surprised the regulator needs the additional expertise.

“Certainly the NCUA auditors that we have encountered are more than capable,” she said.

The CFO also said the fee would in effect be double taxation on large credit unions. Because the NCUA already collects operating fees from credit unions as a percentage of assets, she said, large credit unions pay 80% of operating fees and assessments, so they would already bear much of the cost resulting from operating budget increases.

Vincent Pennisi, executive vice president at the $54 billion Navy Federal Credit Union, said a fee structure wouldn't prevent his 4.3 million member cooperative from applying for the Level II authority should the rule be finalized. Navy FCU also participated in the NCUA pilot program.

But, Pennisi did say it could be a problem for smaller credit unions.

“Credit unions could benefit from derivatives, but the fees could create a barrier to entry for some credit unions to enter the program,” he said. “And, the fee negatively impacts the value of the transactions. It's a potential disincentive.”

Robert Perry, financial adviser at investment firm ALM First, said the potential fee structure was part of every conversation he's had with a credit union about the proposed rule, and added, “It's not sitting well with a few of them.”

ALM First conducted the pilot program for the NCUA, making the transactions for eight of the 10 credit unions that participated. The Dallas-based firm, which had previously gained NCUA authority to make derivatives transactions for its clients, inherited credit unions participating in the pilot program through Western Bridge Corporate FCU after it was liquidated.

“The break-even point is further out now,” he said. “You have to get in big enough to make sense, and the more up-front costs, the bigger than number will be.”