L (Liquidity)

According to a study by the NCUA’s Chief Economist, credit union members could save thousands of dollars on their mortgages when compared to borrowers at other financial institutions.

In a recent column on reuters.com, Ann Saphir writes “Dallas Federal Reserve Bank President Robert Kaplan on Tuesday repeated his view that the current setting of U.S. interest rates is “roughly appropriate” through the end of this year, even as he noted risks from the flu-like epidemic that has brought parts of China to a halt.”

Jacob Passy writes in a January 26, 2020 article in marketwatch.com that upcoming changes in FICO’s credit scoring system will have an impact on many consumers and lenders.

Ray Birch writes, in a January 5, 2020 article on cutoday.info, “Experian early this year will introduce a new credit score product it says will help financial institutions make loans to more credit invisible and thin-file consumers—a huge market of more than 100-million people.”

In a December 12, 2019 article on cutimes.com, Roy Urrico writes: “TransUnion forecasts balances and originations to grow for most key credit products and serious delinquency rates to either decline or remain steady for auto and unsecured personal loans, cards, and mortgages.”

Tina Orem, in a December 9, 2019 article on cutimes.com, writes that credit unions are less efficient than banks and thrifts when it comes to assets per employee, according to new data from financial institution research firm Moebs Services.

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.

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.

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.

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.