Asset Quality

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.

Joyce M. Rosenberg, in a September 30, 2019 article in,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, 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.

A September 11, 2019 article in 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.