Asset Quality

A December 12, 2019 article in reports: “U.S. business debt exceeded that of households for the first time since 1991, a potential warning sign for the economy as corporate investment softens”.

Credit union managers should be constantly checking their balance sheets and loan portfolios for early warning signs of impending reductions in earnings and/or increases in loan losses.

Jim DePlessis writes in a December 5, 2019 article in that mortgage loans have been doing relatively well  for lenders in 2019 but auto loans have decreased from a year ago.

Credit unions (particularly smaller credit unions) will find it more difficult to compete in a shrinking auto loan market.  Fortunately, there are ways to profitably reach deeper into the auto loan pool by effectively pricing risk into lower credit-grade loans.

David Bauman, in a November 13, 2019 article in, writes “The Small Business Administration failed to review many of its high-risk lenders between 2015 and 2017, placing billions of dollars of loan guarantys (sic) at risk, the agency’s Inspector General said, in a just-released report.”