NCUA - Changes Planned for Upcoming Call Reports

Dear Board of Directors and Chief Executive Officer:

To more precisely measure each credit union’s financial condition, NCUA is planning several significant reporting changes to the 5300 Call Report and Profile. This letter describes additions and revisions scheduled for the next three Call Report cycles.¹ We are providing notice well in advance to ensure you have sufficient time to prepare. READ MORE > Pages - Changes Planned for Upcoming Call Reports

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New Analysis Sees Flat Mortgage Market for Next Several Years, Rates to Remain Above 6%

NEW YORK — The U.S. housing market could experience its weakest year in more than a decade as elevated mortgage rates suppress sales and keep home prices nearly flat, according to a Capital Economic s forecast. Capital Economics expects annual home sales to fall to about 4.7 million by the end of 2026, which would represent the slowest pace since 2011. After a modest recovery in 2025, homebuying activity has weakened this year as borrowing costs have increased amid renewed inflation concerns and expectations for higher Federal Reserve interest rates. “Strengthening economic growth will not provide much of a lift to the housing market, which we expect to remain in its structural malaise,” Capital Economics economists wrote, according to Business Insider. Mortgage Rates to Remain Above 6% Capital Economics expects mortgage rates to remain above 6% for at least two more years, continuing to constrain affordability and discourage homeowners with lower-rate mortgages from selling. The aver...

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Charting Your Career Path in the Age of AI: 6 Questions to Get You Started

By Peter Myers Increasingly, seasoned talent is stepping out of senior leadership roles and green talent is filling the void. By 2030, 21% of the population will be 65+ (a 25% increase over five years) and Gen Z will represent ~30% of our workforce. As institutional knowledge and wisdom voids are created, credit union leadership and governing bodies must also grapple with the reality that 32% of U.S. adults score below the baseline proficiency level in adaptive problem solving, and that a growing number are “ clustered at the bottom levels of proficiency .” However, big changes also present big opportunities for those committed to developing their leadership skills. Enter Generative & Agentic AI Not only is the composition of the workforce changing significantly, existing processes and jobs are being upended by Artificial Intelligence. Boards are asking for the AI strategy as employees fear being replaced. It’s a new and evolving landscape that r...

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NCUA Says Credit Unions Can Move Immediately To Six Board Meetings A Year

ALEXANDRIA, Va.--NCUA notified federal credit unions Wednesday that it considers changes to board meeting requirements following enactment of the Credit Union Board Modernization Act as self-executing. That means a qualifying federal credit union may begin using a six-meeting schedule immediately by amending its bylaws, without being required to first submit them to the NCUA for approval, America's Credit Unions reported. ACU noted the new law amends Section 113 of the Federal Credit Union Act, replacing the requirement that a federal credit union board meet at least once a month to at least six times a year, with three tiers: Credit unions in their first five years of operation must meet at least monthly Federal credit unions with composite CAMELS ratings of 1 or 2 and corresponding management ratings of 1 or 2 have the flexibility to meet just six times per year, with at least one meeting per fiscal quarter, but can meet more often at their discretion Federal credit unions with...

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Bipartisan Bill Would Expand Federal Credit Union Investment Authority

WASHINGTON—Reps. Janelle Bynum (D-OR) and Young Kim (R-CA) introduced bipartisan legislation Thursday that would significantly broaden the investments available to federal credit unions, including giving them new authority to invest in corporate debt and asset-backed securities. Young Kim The Credit Union Investment Authority Act would amend the Federal Credit Union Act to expand federal credit unions’ investment authority. Under the bill, federal credit unions could invest in marketable debt obligations issued by companies and other organizations that are not limited to serving credit unions. The legislation would cap a credit union’s investment in the obligations of any single issuer at 10% of its paid-in unimpaired capital and surplus. The measure would also expressly authorize investments in asset-backed securities as defined under the Securities Exchange Act of 1934. Kathleen Coulombe The bill would require the NCUA board to issue implementing regulations within one year of enactm...

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Inflation Cools in June Report, But One CU Economist Says There’s One Reason–And it Could Change

WASHINGTON — U.S. consumer inflation cooled more than expected in June, offering relief after several months of elevated price pressures, though economists cautioned the improvement could prove temporary as renewed geopolitical tensions threaten to push energy prices higher. The Consumer Price Index fell 0.4% in June on a seasonally adjusted basis, the largest monthly decline since April 2020, after rising 0.5% in May, according to data released Tuesday by the Bureau of Labor Statistics . Compared with a year earlier, consumer prices rose 3.5%, down from 4.2% in May. Foot off the Gas Dawit Kebede “Falling gas prices led June’s decline and pulled headline inflation lower year-over-year. Renewed hostilities could complicate the energy picture ahead, and a reversal in gasoline costs would be the most likely channel for that pressure to show up,” said America’s Credit Unions Senior Economist Dawit Kebede. “But softening core prices point to broader-based moderation, suggesting the ea...

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Liquidity Resources

Liquidity Resources Liquidity is a credit union’s capacity to meet its cash and collateral obligations at a reasonable cost. Adequate liquidity is necessary to efficiently meet both expected and unexpected cash flows and collateral needs without compromising the credit union’s daily operations or financial condition. Effective credit union management identifies, measures, monitors, and controls exposure to liquidity risk. Primary Risks In managing expected cash flows, a credit union may experience situations that increase its liquidity risk. These situations include mismatches between sources and uses of funds, market constraints on the ability to convert assets into cash or to access sources of funds (market liquidity), and contingent liquidity events. Changes in economic conditions or exposure to credit, market, operational, legal, and also can affect an institution’s liquidity risk profile. None of these risks are mutually exclusive, and interrelated risks may contribute to increase...

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Invest in Education - Invest in Tomorrow

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Mortgage payments are already less affordable relative to income than at any time since 2008

WASHINGTON–While still low by traditional standards, mortgage rates have now risen for three straight weeks. The rate increases are partly in response to expectations the Federal Reserve will raise interest rates at least three times during 2021, as rates are closely tied to the 10-year Treasury. As of Jan. 13, the average rate on a 30-year, fixed-rate mortgage was 3.871%, while it was 3.592% on a 30-year fixed FHA mortgage and 3.632% on a 30-year fixed VA loan. A year ago, the average rate on the 30-year was 2.79%, just above its record low of 2.65%. Meanwhile, the higher borrowing costs combined with record-high home prices could push some would-be buyers out of the market. According to the National Association of Realtors, the median price for existing homes rose 13.9% in November from a year earlier to $353,900. “Given the fast pace of home price growth, [higher rates] will likely dampen demand in the near future,” Sam Khater, chief economist at Freddie Mac, said in a statement...

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Know Before You Owe: Credit Cards

Know Before You Owe: Credit Cards : Wrtiten by Steve Van Beek Well, the CFPB wasn't lying when it stated its initial focus would be on mortgages, credit cards and student loans. We now have "Know Before You Owe" projects for each one Know Before You Owe: Mortgage Loans Know Before You Owe: Student Loans Know Before You Owe: Credit Cards Yesterday, the CFPB announced their first steps toward clarifying and condensing credit card agreements. Press Release Prototype Credit Card Agreement Listing of Definitions for Prototype Agreement The announcement also came with a pair of blog posts from the CFPB. Shopping for a Credit Card Making Credit Card Agreements Understandable Similar to the other Know Before You Owe projects, the CFPB is actively soliciting feedback on their prototype. Importantly, this is not a proposed rule . However, it is the CFPB's first steps toward collecting information and attempting to clarify credit cards for consu...

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7 Things to Do (And Avoid) with SMS/Text in Credit Union Marketing

By not using SMS text messaging for marketing, you are missing a channel with a 98% open rate and a rapid response rate. Consumers love the convenience and are open to receiving personalized and relevant texts from their bank and credit union. Naturally there are some caveats to be aware of. Here are seven pointers. Are you content to have your customers take 90 minutes to respond back to a communication you’ve sent, or would 90 seconds be better? That’s the difference in average response times between email and SMS text. Then there is the open rate: SMS texts have high open rates — up to 98%, according to Gartner and 82% by another source. The average open rate of email is around 20%. If you send an email with a link to a survey to find out what a consumer thinks about the virtual meeting with a lending officer they just had, it may linger in the consumers’ inbox for days, at which point the experience is no longer top-of-mind or the consumer decides to simply delete the ...

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