C (Capital Adequacy)

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.

Brian Chappatta in an August 14, 2019 article in thinkadvisor.com reports why he thinks the recent yield curve inversions are an ominous sign for the economy – and for financial institutions.

Financial institutions should be carefully monitoring Interest Rate Risk in their investment and loan portfolios so the next recession does not impact them as the 2008 recession did.

Bernice Napach in an August 14, 2019 article in thinkadvisor.com reports new records in household debt as reported by the New York Fed. She goes on to report that although the aggregate delinquency rates improved in the second quarter of 2019, two-thirds of the $604 billion of delinquent debt was seriously delinquent — 90 days or more overdue.

Trevor Hunnicutt reports in an August 2019 article in reuters.com that credit card debt has risen and so have delinquent accounts. Also, almost 10% of student debt is now seriously delinquent.

This report makes it clear that credit unions need to be vigilant when it comes to lending and controlling risk in existing loan portfolios.

Aarthi Swaminathan reports in an August 8, 2019 article in finance.yahoo.com that student loans are adversely impacting the lives of young people.

Student loans for many Americans will hamper their ability to afford large purchase items such as autos and homes far into the future. Credit unions will need to carefully assess the risk in loaning to consumers who carry student debt – especially low-income consumers.

An August 5, 2019 article in bankrate.com, written by Mary Wisienski, reports that young Americans still like branches to transact income-generating banking business like loan applications, mortgages, etc.

Financial institutions may need to reconsider cutting back on their brick and mortar branches if they wish to maintain a competitive edge with consumers.