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INTEREST RATE FOCUS: CUs CAN PREPARE
updated 07/08/14 10:46 AM
Three Scenarios to Watch for
The future of when and how fast interest rates will rise is impacting every credit union—and to some degree will determine the industry’s ability to meet larger objectives being plotted in the current strategic planning season.

“No one can predict the future of interest rates,” said Dwight Johnston, vice president and chief economist for the California and Nevada Credit Union Leagues. “You might get lucky and guess right, but there is no clear path, especially with rates already so low.”

Ready for Any Outcome
How does this uncertainty impact your credit union’s planning?

Johnston says that unless a credit union’s management and board have “some great insight” about rates and plan on only one outcome, they’ll have to address the impact on the balance sheet and earnings across multiple outcomes.

“You can focus on budget projections using a consensus forecast, but you’ll need knowledge of what happens under other scenarios to prepare for Plans B and C if the tide turns on rates,” he said.

While there's a consensus forecast for rates the rest of 2014 and through 2015, the arguments for an extreme outcome, whether high or low, have merit, Johnston said. He presents three possible rate scenarios using the 10-year Treasury bond.

“For the past few years the low-rate path was, quite frankly, an easy call to make. You didn’t need to spend much time examining the impact of any other outcome,” he said. “That’s not the case in the coming months.”

Three Interest Rate Scenarios
Johnston gives the following simplified arguments for each interest-rate scenario on the 10-year U.S. Treasury bond so credit unions can plan appropriately (click on the accompanying chart). Credit unions can keep this guide in mind as the months ahead unfold:

  • Scenario 1 (low-rate forecast): The economies of Europe and China stumble, slowing down the U.S. recovery to stall speed. Deflation fears keep global interest rates at, or near, historic lows.
  • Scenario 2 (consensus forecast): The economy continues a slow but sustainable recovery, and interest rates begin a slow, steady climb. Stable inflation prevents any sharp increase in rates. The Federal Reserve does not tighten rates until late 2015.
  • Scenario 3 (high-rate forecast): The economy recovers faster than the Fed recognizes. Inflation expectations rise, and the Fed is perceived as behind the curve. The bond market revolts.

Click here for Dwight Johnston's complete interest-rate forecast commentary via the DJ's Economix webpage.

 
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RATE HIKE UNLIKELY BEFORE MID-2015 updated 01/29/15 08:38 AM
Fed Watching Economic Developments
California and Nevada credit unions are cautiously keeping an eye on 2015 interest rates, and some are expecting short-term rates to increase this summer. Economists suspect the Fed is waiting to see how inflation and the global economy respond to recent shaky periods before making a decision.

'APPLE PAY' EXPANDS IN CALIFORNIA updated 01/28/15 10:07 AM
CU Leaders Discuss Member Adoption
Apple Pay will soon be in the hands of more California credit union members—this time at KeyPoint Credit Union in Santa Clara, CA.

ACCEPTING APPS: CU ADVISORY COUNCIL updated 01/27/15 11:00 AM
Eight Seats Vacant in Fall 2015
The Consumer Financial Protection Bureau (CFPB) is accepting applications for membership on its Credit Union Advisory Council and inviting individuals who can provide the bureau with guidance as it carries out its work.

CONGRESSMAN VISITS TRAVIS CU LEADERS updated 01/27/15 10:39 AM
DeSaulnier Makes it a Top Priority
As first reported on the California and Nevada Credit Union Leagues’ Advocacy Blog, newly sworn-in Rep. Mark DeSaulnier, D-CA, attended a district meeting at Travis CU on Jan. 23.

CLARK COUNTY CU AWARDS DIVIDENDS updated 01/22/15 02:07 PM
$2.7 Million to 34,000 Members
For Clark County CU, 2014 was a successful year as the credit union closed out with a healthy net worth ratio of 11.77 percent and recorded an annualized net income of nearly $12.3 million. This afforded the credit union to award a whopping $2.7 million in bonus dividends to nearly 34,000 members. Each bonus averages $79 per member, with the highest single bonus totaling just more than $10,000.

BIZ KID$ FINANCIAL GRANTS AVAILABLE updated 01/21/15 12:41 PM
Application Deadline is March 31
Promote financial literacy at your credit union and in your community with a Biz Kid$ Financial Education Grant from the National Credit Union Foundation (NCUF). Apply for the grant by March 31, 2015.

IMMIGRANT EVENT ANSWERS QUESTIONS updated 01/20/15 11:41 AM
Los Angeles Councilman Speaks
With President Barack Obama’s recently issued executive order on immigration, something transformative could be in store for credit unions serving immigrant communities—but it’s going to take more knowledge, more action, and a desire to understand the culture and language surrounding this group of individuals.

NCUA's SECOND RBC PROPOSAL updated 01/15/15 10:32 AM
New Draft More Favorable
The Leagues are thoroughly reviewing the National Credit Union Administration’s (NCUA) 450-plus page Risk-Based Capital Proposed Rule in detail to understand its components and potential impact. It seems this second proposed rule is more favorable than its first draft, and that most of our requests were at least partially addressed.

RBC DISCUSSION VIDEO AVAILABLE updated 01/15/15 03:45 PM
Captures Revised Plan
The Credit Union National Association (CUNA) video of today's National Credit Union Administration (NCUA) open board meeting discussion of a new risk-based capital (RBC) plan is now available for viewing.

NCUA PAYS FOR DATA BREACH updated 01/15/15 02:33 PM
Palm Springs FCU Receives Up To $50K
The National Credit Union Administration (NCUA) board has approved payment of up to $50,000 for costs associated with a data breach at Palm Springs FCU late last year.

CO-OP PROCESSED 3B IN 2014 updated 01/14/15 11:04 AM
Sets New Record
CO-OP Financial Services processed more than three billion electronic funds transfer (EFT) and shared branch transactions by credit union members in 2014—an 8 percent increase compared to 2013. This sets a new record for CO-OP.

CUs MEET WITH NCUA, CFPB OFFICIALS updated 01/13/15 09:44 AM
2nd RBC Proposal, Overdraft Discussed
California and Nevada credit union leaders met last week with officials from the National Credit Union Administration (NCUA) and Consumer Financial Protection Bureau (CFPB) to discuss the agencies’ regulatory impact on credit unions.

CO-OP ANNOUNCES THREE PROMOTIONS updated 01/12/15 12:18 PM
New CIO, CMO, and SVP
CO-OP Financial Services has promoted three employees to new positions: Terrence Griffin has been promoted to chief information officer; Samantha Paxson to chief marketing officer; and Connie Trudgeon to SVP of network operations and implementation.

'GAC' AND 'GRR': TWO POWERFUL EVENTS updated 01/12/15 04:37 PM
Your Voice is Needed
The credit union movement needs YOUR voice in Washington, D.C., Sacramento, and Carson City this year as discussions take place on legislative policies that may affect credit unions at the state and federal levels, as well as regulatory issues.

WCMS PRES. RETIRES AFTER 44 YEARS updated 01/09/15 04:44 PM
James D. Likens To Serve Through 2015
Western CUNA Management School (WCMS) officials have announced that Dr. James D. Likens will be retiring from his post as president and CEO of the school at the end of 2015. Likens will continue to direct the school through the end of the year.

CA/NV CUs CAN VIEW RBC DIALOGUE updated 01/09/15 02:26 PM
CUNA to Record NCUA Session
California and Nevada credit unions will have the opportunity view the National Credit Union Administration (NCUA) risk- based capital (RBC) discussion meeting on Jan. 15.

SEN. BOXER NOT SEEKING RE-ELECTION updated 01/08/15 10:22 AM
Served Two Decades in U.S. Senate
In a video announcement earlier this morning, Senator Barbara Boxer (D-CA) stated she will not seek re-election in 2016 when her term expires. Her retirement announcement is not unexpected.

DYKSTRA TALKS LEADERSHIP updated 01/08/15 09:04 AM
CUToday.info Interview
California and Nevada Credit Union Leagues President and CEO Diana Dykstra was recently interviewed by CUToday.info to share her thoughts on leadership and management. In this interview, Dykstra talks about communication, working with board of directors, staying relevant, and more.

LEAGUES OFFICIALLY LAUNCH 'PLEXCITY' updated 01/06/15 10:13 AM
Unique Shared-Service Vision
The California Credit Union League, Maryland and District of Columbia Credit Union Association, and New Jersey Credit Union League officially launched Plexcity on Jan. 2—a new shared-services company that will aggregate accounting and finance, human resources, and information technology departments for trade associations across the nation.

CUNA ANNOUNCES REORGANIZATION updated 01/06/15 02:06 PM
Changes to Senior Leadership Team
The Credit Union National Association (CUNA) has announced the reorganization of its senior leadership team in an effort to streamline and better serve the needs and interests of credit unions.

114TH CONGRESS BEGINS TODAY updated 01/06/15 01:43 PM
Leagues Join Aguilar in Swearing-In
Today is the beginning of the 114th session of Congress and the California and Nevada Credit Union Leagues was there to welcome members.

JENSEN JOINS LEAGUES' ADVOCACY TEAM updated 01/05/15 11:29 AM
Will Represent CUs in Sacramento, Carson City
Courtney Jensen has joined the California and Nevada Credit Union Leagues as legislative advocate, where she will support and promote credit unions at the state level.

CMN FUNDRAISING REMITTANCE updated 01/05/15 10:51 AM
Submission Deadline: Jan. 16
If your credit union raised funds for Children’s Miracle Network (CMN) Hospitals in 2014, please submit your funds on or before Jan. 16 to count toward 2014 fundraising totals. Click here to access the form, which includes mailing instructions, along with your fundraising check.

CA CUs GAIN CORPORATE REPRESENTATION updated 01/05/15 10:15 AM
Steve Devan on Catalyst Board
For the first time since the corporate credit union world experienced enormous regulatory changes, a sizeable number of California credit unions are gaining a voice on the board of directors at a large corporate: Steve Devan, CEO of $90-million-asset Grossmont Schools FCU in El Cajon, CA.