A (Asset Quality)

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.

NAFCU reports that NCUA Board Member J. Mark McWatters, in October, stated he would support – and hopes the NCUA soon acts on – a rule that would phase in CECL's impact on credit unions' net-worth ratios over three years.

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.

Damien Paletta, in an October 2, 2019 article in washingtonpost.com, writes “the federal government has dramatically expanded its exposure to risky mortgages, as federal officials over the past four years took steps that cleared the way for companies to issue loans that many borrowers might not be able to repay”.

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.

In a September 25, 2019 article in bankrate.com, written by Adrian Garcia, it is reported that 40% of American families unprepared to weather a financial emergency such as a recession.

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 11, 2019 article in news.cuna.org describes the challenges credit unions are facing as the deadline for Current Expected Credit Losses implementation looms.

Despite objections by CUNA that CECL should not apply to credit unions, NCUA intends to press ahead with the implementation according to the deadline. Credit unions need to be prepared and on schedule for CECL.