Credit Unions: What we’ve seen and what we expect
By: Brian Sullivan, CPA, | email
What we’ve seen in 2013:
- Credit unions have seen their profitability stabilize in 2013 when compared to 2012.
- Through the first six months of 2013, credit unions have maintained a return on assets of 0.84%.
- For the first half of 2013 the interest yields on loans and investments have continued to trend downward to 5.09% and 1.05%, respectively.
- New rules from the NCUA regarding the framework for managing liquidity.
- Credit Unions under 50 million must develop a written liquidity policy.
- Credit Unions over 50 million in size must develop a written liquidity policy and must also have a contingency funding plan that clearly sets out strategies for meeting emergency liquidity needs.
- Credit Unions over 250 million in size must also establish access to at least one contingent federal liquidity source, either NCUA’s Central Liquidity Facility or the Federal Reserve’s Discount Window.
- The increased definition of a small credit union from $10 million to $50 million in assets.
- In the first half of 2013 the amount of delinquent loans to loans fell by 0.16% to be on average under 1%.
What we expect to see in 2014:
- Interest yields are expected to remain steady for both loans and investments.
- More legislation from the NCUA on CUSO’s that offer complex or high risk activities.
- CUNA believes that there will be no NCUA corporate assessment in 2014.
- More demand and affordability of mobile products.
- More concentration on Non-interest income, for example, increased fees or new products being offered.
- Charging members for deposit accounts?
- Mergers; due to retiring, aging managers, continued stress on earnings, inability to retain and attract staff.