Asset Liability Management (ALM) Policy

Ensure the asset liability management policy addresses interest rate risk limits, monitoring, reporting, and controls. ALM is a process of evaluating balance sheet risk (interest rate and liquidity risks) and making prudent decisions, which enables a credit union to remain financially viable as economic conditions change. An ALM policy is necessary to control interest rate risk and liquidity risk associated with longer term investments, real estate loans, and business lending activities. The following Letters to Credit Unions and the Examiner’s Guide provide additional information:

• 00-CU-14, Liquidity and Balance Sheet Risk Management

• 01-CU-08, Liability Management - Highly Rate-Sensitive & Volatile Funding Sources

• 10-CU-06, Interagency Advisory on Interest Rate Risk Management

• 10-CU-14, Strengthening Funding and Liquidity Risk Management

• 12-CU-05, Interest Rate Risk Policy and Program Requirements

• 12-CU-11, Interest Rate Risk Policy and Program Frequently Asked Questions

• 13-CU-10, Guidance on How to Comply with NCUA Regulation §741.12 Liquidity and Contingency Funding Plans

Last updated on March 30, 2026