First-responder Credit Union Newsroom

BENGALURU, Oct 29 (Reuters)—The U.S. Federal Reserve will cut its key interest rate by 25 basis points on Nov. 7, according to all 111 economists in a Reuters poll. More than 90% of the economists predicted another quarter-percentage-point move in December. Since the U.S. central bank kicked off its long-awaited easing cycle last month with a half-percentage-point reduction in the federal funds rate to a 4.75-5.00% range, news on the economy has been strong, including consumer spending and jobs data. The Fed's next policy meeting is scheduled to start just after the Nov. 5 U.S. presidential election . Opinion polls show a neck-and-neck race, but recent momentum has shifted toward  Republican candidate Donald Trump. All 111 economists in the Oct. 23-29 Reuters poll predicted the Fed will switch back to a quarter-percentage-point reduction next week. More than 90% of them, a total of 103, expected the same-sized move in December, taking the fed...

The CFPB ordered Jacksonville, Fla.-based VyStar Credit Union ($14.7 billion in assets, 997,469 members) to pay a $1.5 million civil penalty for its failed online banking system rollout in 2022 . On May 13, 2022, VyStar attempted to switch to a new online and mobile banking platform. The brief outage, as explained to members, was planned to last for two days. The outage lasted for more than a week, and systems were still not fully functional a month later. At the time, members were furious and posted tens of thousands of complaints on the credit union's Facebook page. Thursday's action by the CFPB called VyStar's rollout "botched" and "dysfunctional." "VyStar and its senior management bungled the credit union's rollout of a new banking system and left customers stranded without online access to their accounts," said CFPB Director Rohit Chopra. "VyStar's careless errors inflicted financial harm on their credit union members." T...

The Federal Reserve's pivot to cutting interest rates presents a complex landscape for financial institutions, combining fresh opportunities with heightened risks. While lower rates typically spark increased lending activity, banks face unprecedented challenges: credit card delinquencies have hit a 12-year high, and nearly 40% of cardholders have maxed out cards since rates began rising. Now that the U.S. Federal Reserve has finally started to cut interest rates to achieve a soft economic landing expect activity to ramp up at banks and credit unions as consumers and businesses adjust their finances to reflect the new reality. Some will seek high-rate CDs while they’re still available, others will want to consolidate credit card debt, and mortgage activity may pick up, too. This sounds positive, but for financial institutions, the monetary policy shift reflects rising risks from both new competitive pressures and the risks of serving debt-strapped consumers. A range of Federal Res...

By Ray Birch ROANOKE, Va.—Is an answer to the succession planning problem at small credit unions creating "co-CEO" positions? One $103-million credit union that has two chief executive officers believes it is a solution for a number of small shops that lack a succession plan for their leader. Roanoke Valley Community CU is led by Pam Duke and Lauren Whitmire. The co-bosses spoke with CUToday.info about how having a small team leading the organization has made it more successful and the job of running the show easier. "As I am heading towards retirement, I wanted to make sure we had a succession plan in place for this credit union," said Duke, who is 61. "In the credit union movement, generally, it's difficult to replace CEOs at small credit unions. I've been here 16 years, and Lauren has been here 14. We wanted to make sure this credit union continues on, even if she or I would leave." Duke explained that her focus at RVCU is on the lending side, o...

LAKE FOREST, Ill.—Are credit unions using money supply to determine deposit pricing? One economist suggests using money supply in an adjusted manner is a useful pricing tool. Michael Moebs, economist and chair of Moebs $ervices, explained why. “Money supply is best measured by discarding currency and foreign funds. Focus only on domestic deposits,” said Moebs. “Adjusting money supply, showing only the deposit essentials, helps identify strategic and tactical actions depositories can make. Use money stock as defined (see table below) and offer high rates. The market demands higher deposit interest rates.” Moebs said using money supply is simply a different—more effective—way to price deposits in a period in which liquidity dollars are in high demand. Different Thinking “This is not something financial institutions typically think about doing,” said Moebs. “Think of it this way. It is now apple season in the nation. You are a family of four that each wants apples to eat. Are apples sold ...

Federal regulators want to make it less of a pain to change your bank — but first, it looks like they’ll have to win a battle in court. On Tuesday, the Consumer Financial Protection Bureau (CFPB) unveiled the final version of its highly anticipated  open banking rule , which aims to create more competition between financial services companies by making it simpler for customers to transfer their personal data between them. The measure is in part designed to relieve some of the common headaches familiar to anyone who has ever tried to move their checking account or upgrade to a better credit card — a process that can require manually resetting a number of automatic bill payments and may mean losing years' worth of transactions history. Those kinds of inconveniences are known to keep many consumers from shopping around for better deals. One survey found that the average American has had the  same checking account for more than 17 years ; about 10% of consumers say they haven’t sw...

MADISON, Wis.—The current rate environment, for a change, may actually be favoring small CUs, data from TruStage’s latest Trends Report show. The September Trends Report, which is based on CU performance through July, reveals the credit union return-on-asset ratio fell to 0.66% in the first six months of 2024, on an annualized basis, down from 0.78% in the first six months of 2023. The 12-basis point decrease in earnings during the last year was driven by a 15-basis point increase in provisions for loan losses as a percent of average assets, and a 7-basis point increase in operating expense ratios, the report states. Higher Earnings Partially offsetting the expense increase was a 3-basis point increase in net interest margins and a 6-basis point increase in fee and other income ratios. Credit unions with assets greater than $50 million reported a drop in earnings while smaller credit unions reported higher earnings due to the difference in the increase in their cost of funds ratios. St...