C (Capital Adequacy)

Gwen Everett and Shahien Nasiripour, in an October 28, 2019 article in bloomberg.com, report that American homeowners appear to have learned the lessons of the 2008 Great Recession and are not using the equity in their homes to finance large purchases unrelated to housing.

A September 27, 2019 article in thinkadvisor.com, written by Michael S. Fischer, shows that a third of survey respondents said they expected their finances to remain a source of stress in the future, and two in five worried that they would not enjoy their later years because of money issues.

Joyce M. Rosenberg, in a September 30, 2019 article in apnews.com,writes that small businesses are having difficulty expanding their companies because traditional lenders are cutting back on lending.

Credit unions may find this an opportunity to expand lending providing they: (1) carefully track profitability of individual services; (2) price loans based on individual risk; (3) have policies in place to assure compliance with regulations and risk control, and (4) manage the risk in loan portfolios.

Amanda Dixon, in an October 2, 2019 article in bankrate.com, reports that ATM and Overdraft fees have risen steadfastly over the last 20 years.

Credit unions have become dependent on fees even to the point that some subsidize their loan programs with fee income. This trend has attracted the attention of litigators and legislators. Credit unions should make sure their loan programs are profitable and not dependent on fee income to subsidize lending.

Jeff Berman, in a September 10, 2019 article in thinkadvisor.com, writes that Gen Xers (age 39 to 54) are struggling with debt so overwhelming that they are not saving for retirement. These people need to be watched by lenders.

Jonathan Barkley in a September 11, 2019 article in cuinsight.com writes that loan delinquencies are on the rise and projected to get worse.

Credit unions should have tools in place for pricing and managing the risk in their loan portfolios.

A September 9, 2019 article in apnews.com written by Martin Crutsinger describes how consumer borrowing in July, 2019 was the highest in two years.

This is good news for credit unions so long as they are participating in the loan growth, risk is being managed and lending is profitable.

Caroline Hroncich, in a September 3, 2019 article in benefitnews.com, writes that HSAs are expected to surge in coming years – perhaps becoming the IRAs of the future.

The big question for credit unions is the extent to be involved in services such as HSAs and how should they be priced and managed to assure Interest Rate Risk and profitability is managed appropriately.

Kathleen Howley in a September 16, 2019 article in housingwire.com writes that consumer FICO scores are presently the highest on record.