Asset Quality

Claire Dickey, in a June 20, 2019 article in bankrate.com, reports that more than half of Americans will pay for their children’s summer care with credit card debt. Most of those will carry the debt into coming months.

Carrying over credit card debt for services already consumed can lead to financial strains as debt accumulates. Credit unions need to have management tools in place that track each borrower for signs of financial stress that could lead to loan delinquency or defaults.

Jim DuPlessis, in a June 11, 2019 article in cutimes.com, reports that credit unions held $61.8 billion in credit card debt in April, 2019, up 8.3% from a year earlier, according to a Fed report.

Increasing credit card portfolios may be a source of increasing loan revenues, but credit card debt has its own unique risks and needs to carefully managed.

Sally Bakewell and Thomas Beardsworth, in a June 11, 2019 article in bloomberg.com, write that regulators are becoming more concerned over institutions that are loading up on higher risk loans.

Credit unions can look for more examiner scrutiny relating to their lending practices and loan portfolios.

Jim DuPlessis, in a June 04, 2019 article in cutimes.com, reports that credit union loan growth peaked two years ago.

Credit unions should be strategizing how they plan to keep their loan portfolios growing to avoid diminishing loan revenues in coming years. There are methods to profitably reach deeper into the consumer loan market and lend to borrowers in lower credit grades.

Charisse Jones, in a May 29, 2019 USA Today article, reports that college students are not optimistic they will ever be able to pay off their student loans.

Many young consumers are facing more financial stress than previous generations. Credit unions need to be managing the risk in their loan portfolios with effective tools that price loans for risk and that keep managers aware of the growing risk in existing loan portfolios.

Jim DuPlessis in a May 06, 2019 article in cutimes.com reports that credit unions may be facing more difficulty meeting their loan growth and profitability goals.

Credit unions need to have management tools in place that track key balance sheet numbers and ratios so they can measure progress or lack thereof relating to growth, profitability and achievement of goals.

Karl W. Smith in an April 24, 2019 article in cutimes.com reports that financial upheaval may be in the works for Boomers leading to major changes in their net worth.

Credit unions need to be aware of changing demographics in their market areas as well as the nation that could impact future earnings and lending programs.

Credit Card Charge-Offs Hit Seven Year High

Americanbanker.com in an April 26, 2019 article reports that credit card red flags are flying.

Credit unions need to be managing the risk in their loan portfolios with effective tools that price loans for risk and that make managers aware of the growing risk in existing loan portfolios.

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