How current economic trends impact credit unions

by. Lisa Hochgraf

Today at CUES’ Execu/Summit, Economist Bill Conerly, Ph.D., gave attendees (such as Center for Credit Union Board Excellence member Phillip Martinez, director of $796 million Texas Trust Credit Union, Mansfield, Texas, in the photo at right) an overview of what he sees in the economy today and next year. Then, he asked attendees to work together to identify areas of the forecast that might affect their credit unions and how. Here’s what they said:

• Likely rise in interest rates. Interest rates have such a bearing on the mix of products and services we offer and how we plan for them over the next few years. Right now the spread is very small. If interest rates go up and the spread increases, it’s good news, unless you’ve locked in too many mortgages at the low rate.

• Local economy just as important as the national and global economies. For example, attendees from Canada and Texas reported being positively impacted by the current growth in oil. “Every credit union needs to know the economy of its area,” Conerly summarized.

• Changes in savings rates could affect liquidity. Liquidity is needed to fund the loans. If people save differently in the future–like in a 401(k) rather than a certificate of deposit–that affects a credit union’s liquidity and abilty to make loans.

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