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WASHINGTON—Economic growth is likely to decelerate and ultimately result in a mild recession in 2024, followed by a return to growth in 2025, according to the November 2023 commentary from the Fannie Mae Economic and Strategic Research (ESR) Group. While the combination of ongoing employment gains and decelerating inflation has increased the likelihood of a soft landing, the ESR group contends that, between a likely slowdown in consumption growth stemming from an imbalance between spending and incomes and the rising real federal funds rate weighing on consumer and business activity, a downturn remains the most likely outcome, Fannie Mae said. “With mortgage rates having previously neared the 8% mark, the ESR Group expects existing home sales t

    NCUA Reinstates Civil Money Penalties for Late Call Report Filing ALEXANDRIA, Va. (Nov. 28, 2023) – The National Credit Union Administration today announced that it will reinstate assessing civil money penalties for credit unions failing to submit NCUA Form 5300 Call Report on time, effective January 1, 2024. “The program was suspended after the December 2019 cycle due to the COVID-19 pandemic,” NCUA Chairman Todd M. Harper said. “It is now time to reinstate the program to ensure we provide credit union members, the financial services stakeholders, other regulators, and the public with the most accurate and up-to-date quarterly C

WASHINGTON–While Federal Reserve officials indicated they remain open to the possibility of again raising rates, minutes released from the Fed’s October meeting show they are more likely to keep rates steady--and one credit union economist sees potential for a rate cut in 2024. “All participants agreed that the committee was in a position to proceed carefully,” said the minutes of the Oct. 31-Nov. 1 meeting state. “Participants expected that the data arriving in coming months would help clarify the extent to which” a slowdown in inflation was continuing amid higher borrowing costs, according to the minutes.  The Fed’s Open Market Committee is set to meet again on Dec. 12-13, but few expect any rate increase to be considered.  "The minutes from the October FOMC meeting reaffirm that the committee believes monetary policy is currently restrictive,” said NAFCU VP-Research Curt Long. “Given the significant moderation in inflation in 2023, NAFCU believes the FOMC is done ra

NCUA Board meeting, Nov. 16, 2023 During Thursday’s NCUA Board meeting, members voted 3-0 to approve the final rule to amend the charitable donation accounts section adding “war veterans’ organizations” to the definition of a “qualified charity” that federal credit unions may contribute to with a charitable donation account. According to the NCUA, the final rule “adds a post or organization of past or present members of the Armed Forces of the United States, or an auxiliary unit or society of, or a trust or foundation for, any such post or organization recognized as exempt from taxation under section 501(c)(19) of the Internal Revenue Code to the definition of a ‘qualified charity’ that a federal credit union may contribute to using a charitable donation account.” Of note, “qualified charity” is a section 501(c)(3) entity defined by the Internal Revenue Code and must be both a non-profit and organized for a charitable purpose. NCUA Board Chair Todd Harper said, “With th

NAFCU Chief Economist and Vice President of Research Curt Long explores economic indicators, recent survey data, and the NCUA’s proposed 2024-2025 budget in a new economic update video . On the economy, Long notes the slowdown in activity, but says it’s a good thing as the slowdown is controlled: “We’re not seeing a nosedive in the economy that would cause us to worry about a recession.” He also reviews some of the “disappointing” provisions of the NCUA’s proposed budget. Long testified at the agency’s public hearing on the proposal last week. Watch the full video. For more economic updates from NAFCU's award-winning research team, view NAFCU's Macro Data Flash  reports .

By Ray Birch ARLINGTON, Va.—NAFCU hopes credit unions in California don’t begin to back away from offering overdraft programs just because some consumer advocates don’t like the service that has been the target of strong criticisms in national media. As CUToday.info reported here , California’s financial regulator, following a law requiring data be published showing how much state-chartered insitutions in the Golden State are earning from overdraft fees and NSFs, the state’s Department of Financial Protection and Innovation published the first-ever report with details. The full report can be found  here . That report was soon followed by one opinion piece in national media that claimed, “There’s a new predator making money off overdraft fees:

NAFCU, CUNA economists say a report shows the key measure for the Fed is showing progress. By Jim DuPlessis | November 14, 2023 at 05:03 PM Credit/AdobeStock Inflation fell in October by enough that a NAFCU economist believes it could bring the day closer when the Fed will start cutting rates. The U.S. Bureau of Labor Statistics reported Tuesday that the Consumer Price Index rose 3.2% in the 12 months ending in October, down from 3.7% through September. Moreover, there was also progress in the measure most closely watched by the Fed: Core inflation, which excludes the volatile energy and food categories. Core inflation was 4.0% for the 12 months ending October — its smallest 12-month change since September 2021. NAFCU Economist Noah Yosif said the overall inflation rate was below expectations. Falling prices of gasoline was a major contributor, but other sectors slowed as well. “Service inflation has been more stubborn and was the driving

MADISON, Wis.–Ongoing increases in delinquencies, especially in automobile loans, can be seen in the new CUNA Economic Update . According to CUNA Chief Economist Mike Schenk, the report shows: Mortgage delinquencies. With data obtained by Equifax, CUNA economists said they have found “slight upward movements” in mortgage delinquency rates.   Credit card delinquencies. Bigger increases in delinquency rates relative to the cyclical low – as seen during the COVID-19 pandemic – is concerning, said Schenk.   Auto loan delinquencies: Data shows a “dramatic” increase in delinquency rates among institutions such as auto financing companies.  CUNA Forecast   CUNA’s economists are forecasting delinquency rates will peak at 1% by the end of 2024.

WASHINGTON–Mortgage rates saw the biggest one-week drop in over a year last week, causing the first increase in mortgage demand in a month, according to new data. Total mortgage application volume rose 2.5% last week, compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.61% from 7.86%, with points falling to 0.69 from 0.73 (including the origination fee) for loans with a 20% down payment. The Rate Driver "Last week's decrease in rates was driven by the U.S. Treasury's issuance update, the Fed striking a dovish tone in the November FOMC statemen

By Michael Fryzel For the last 24 months and for at least the next 14, the most talked about subject, has been and will be, the economy.  Will inflation slow down? Will there be a recession? Will the Fed increase or decrease the interest rate? What will be the price of a gallon of gas? Will the holiday season be strong enough to save struggling retail stores? Will the cost of groceries ever go down? How high will mortgage rates go? In addition, the crises erupting in Israel, Gaza and Ukraine will continue to be part of the nightly news, as will crime in our cities, devastating storms, worker strikes and the all-important question, will it be Biden vs Trump, again?  All these “other” news events are important and will have an impact on individua

WASHINGTON–Hiring during October cooled considerably, according to new data released last week by the Labor Department. After several months of strong job reports, the new report shows U.S. employers added 150,000 jobs  in October, down from the previous month’s revised gain of 297,000. According to the department, those numbers mark the smallest gain since June, with automakers having around 33,000 fewer workers on payroll because of the United Auto Workers strike. The unemployment rate rose to 3.9% from 3.8% the prior month. ‘A Clear Signal’ "The October employment report sends a clear signal that the labor market is cooling,” said NAFCU VP-Research and Chief Economist Curt Long. “A broad range of measures fell during the month, including

  ATM Attacks on the Rise Joe Woods, SVP Marketing & Partnerships Dolphin Debit Access   Skimming, vandalism, and physical attacks on the ATM, armor/cash-in-transit (CIT) and ATM technicians are all on the rise throughout the U.S. For a criminal, the ATM presents an open environment with multiple escape routes.  Criminals are also very adept at approaching the ATM and making it appear they are conducting usual business.  But in reality, they are placing devices on the ATM to capture card and pin data.  Some sources claim that these attacks on ATMs and personnel have increased 50% over the past three years.  It is clearly a very serious problem. While we cannot control or prevent every attack, we can all work together to help reduce these threats.  Here’s a short list to put into action immediately for your ATM fleet.  1.      If you have branch staff loading external ATMs (or ATMs not loaded from inside the branch) vary the day of the week and time of day they head to t

The new group will now become America’s Credit Unions. By Michael Ogden | November 02, 2023 at 08:45 AM Credit/Adobe Stock The members of CUNA and NAFCU have voted overwhelmingly to approve the merger of the two organizations to form America’s Credit Union. According to a statement Thursday morning from CUNA and NAFCU officials, of those who voted, 94% of CUNA members and 86% of NAFCU members voted in favor of the merger. Voting ended Wednesday at 5 p.m. and were tallied and finalized by each organization’s independent ballot provider. In a statement, CUNA President/CEO Jim Nussle said, “I’d like to thank our credit union members who have been engaged throughout this merger process – asking tough questions, holding us accountable, and helping us plan for the future. I am incredibly humbled to lead this new organization and fight for a stronger credit union industry. Your needs will remain our priority as we embark on this transformation over

The world of payments is ever-evolving, and a significant leap in that trajectory is the move towards real-time payments. A recent webinar delved deep into this topic, and toward the end, webinar attendees were able to ask their questions directly to Dan Gonzalez, VP of Customer Relations at Federal Reserve Financial Services, and Mark Majeske, SVP of Faster Payments at Alacriti. Here are some of the top questions, and what we learned from the Q&A session. Q: What are some of the specific fraud mitigation tools put in place for the FedNow® Service? A (Dan Gonzalez): The FedNow service will offer several tools for fraud mitigation: Mandatory reporting of any fraud to the service, which then notifies both parties involved in the transaction. Creation of negative lists to allow credit unions to block certain payments either in or out. Introduction of dollar limits, initially set at $500,000 per transaction, but institutions can set their own maximum limits based on com

WASHINGTON–As expected, the Federal Reserve has adjourned its meeting here without raising rates, but it also indicated it could again do so in the future. The decision means rates remain at a two-decade high. The adjournment without action marks the second consecutive meetings at which the Fed has not raised rates, it the longest period without an increase since it began to lift rates from near 0% in March 2022. In announcing it would maintain the Fed Funds rate at a range of 5.25% to 5.50%, the Fed said in a statement that recent indicators suggest economic activity expanded at a strong pace in the third quarter, job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.

WASHINGTON–The Federal Reserve will wrap up two days of meetings today, with most analysts predicting it will not move to again raise rates. Following recent numbers showing U.S. GDP was robust, NAFCU’s VP-research and chief economist, Curt Long, said, “Government spending accounted for 0.8 percentage points of overall growth, with state and local spending making up half that growth, while defense spending dominated at the federal level. Despite strong spending, core PCE inflation dropped to 2.4% during the quarter, which is in the neighborhood of the FOMC’s 2% target. NAFCU believes that the Fed is unlikely to raise rates further unless inflation picks up, but strong economic returns will support a higher-for-longer posture.” ‘Diminished Chan