Three things to ponder as you start your credit union day

by: Henry Meier

Here are some things to ponder as you help your kids slip back into reality.

The credit union industry had real, solid growth in the second quarter. I’ve tried to find a soft underbelly to the industry’s economic performance and I can’t find one. The loan to share ratio is up to 71.66 from 70.88 last year, led by rising demand for car loans. In addition, student lending and mortgage loans have also showed marked improvement. The overall trend shows the industry lending out more of its money. There is even a slight decrease in the amount of long term investments but, of course, NCUA says that the current net long term asset ratio of 35.4% remains a “serious threat.” Never mind that interest rates remain at historically low levels, that demand in American bonds will keep yields down for the foreseeable future as Europe continues to struggle, and that there is still plenty of room for growth in the US economy. NCUA is right — someday interest rates will rise and when they do NCUA will say I told you so.

How important is fee income to your credit union? There is an extremely interesting article in the WSJ on fee income. (The very fact that I consider fee income interesting is a sure sign that I should have taken more time off this Summer). The paper is reporting that “As a percentage of total noninterest income, deposit-account fees dropped to 14.1% in 2013, the lowest level since 1942, according to the FDIC data. From 2000 through 2009, those fees accounted for an average of 17% of such income.”

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