12 CFR 703.103
§ 703.103 Requirements related to the characteristics of permissible Interest Rate Risk Derivatives.
United States · 12 CFR — Banks and Banking · Status: effective
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- Citation
- 12 CFR 703.103, § 703.103 Requirements related to the characteristics of permissible Interest Rate Risk Derivatives, United States, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/48453
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Full text
(a) Under this subpart, a Federal credit union may only enter into Derivatives that have the following characteristics:
(1) Are for the purpose of managing Interest Rate Risk;
(2) Denominated in U.S. dollars;
(3) Based on Domestic Interest Rates or the U.S. dollar-denominated London Interbank Offered Rate (LIBOR);
(4) A contract maturity equal to or less than 15 years, as of the Trade Date; and
(5) Not used to create Structured Liability Offerings for members or nonmembers.
(b) A Federal credit union may not engage in embedded options required under U.S. Generally Accepted Accounting Principles (GAAP) to be accounted for separately from the host contract.
Legislative history
This is a federal regulation, adopted through agency rulemaking under the Administrative Procedure Act — not enacted by a recorded vote of Congress.