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Nearly 1,100 Participate in Discovery Webinar

For more information:
Rick Uhlmann 608/231-8940 rick.uhlmann@cunamutual.com
Phil Tschudy 608/231-7188 philip.tschudy@cunamutual.com

MADISON, Wis. – While many credit union leaders are more optimistic than this time last year, CUNA Mutual Group’s Dave Colby told approximately 1,100 registered participants in a Discovery Webinar that 2011-12 will be just as challenging as the previous two years, but for other reasons.

In the first Discovery Webinar of 2011, “Is it Over Yet … Or is This the Calm Before Another Economic Storm?” CUNA Mutual’s chief economist said the geo-political and geo-economic environment are presenting new challenges to credit unions, and that previously deferred decisions by the government must now be made.

“The economy and credit unions achieved some recovery in 2010, including capital growth and net-worth ratio improvement,” Colby said. However, he warned credit unions will be faced with many risk factors.

“We see credit unions managing their key ratios by managing growth. But the biggest challenge remains growing loans, especially short-term consumer loans. This won’t be easy as consumers are in pay-off mode and competition will continue from subsidized financing,” Colby said.

Some of the “headwinds” Colby said credit unions face include weak consumer loan demand, regulatory caps on income (debit interchange, NSF/courtesy pay) and rising compliance burdens. “All of those will continue to challenge credit unions’ ability to replenish capital by growing their bottom lines.”

Further burdening credit unions are risks the economy faces on its road to a full recovery, including prolonged elevated energy prices, continuing credit market uncertainty and external shocks such as terrorism, weather or geological incidents. “The world is in a weaker state, thus the impacts of one of these external shocks would be greater,” Colby added.

“All the risks to credit unions go directly to the bottom line and adversely impact our ability to replenish capital,” Colby said. “He cited near-term risks that include the likelihood of rising compliance costs and the yet-to-be-written rules coming out of the Financial Reform Act.

Longer-term risks are primarily two-fold, Colby said. “As we regain our capital ratios through limiting asset growth, sooner or later expense growth overwhelms us. In the spread business it’s difficult to earn a positive spread without loans. We also need to redefine our role in consumer financial services, he added. “Boomers expect wealth preservation solutions, while the next wave of borrowers expects point-of-purchase financing. To whom will we be relevant?”

Don’t forget to mark your calendars for other 2011 Discovery events, which are offered at no cost to credit unions:

  • April 18 – Lending Trends, presented by Dan Kaiser
  • May 24 – Technology Strategies and Trends, presented by Rick Roy
  • June 18-21 – 17 Discovery sessions will be offered at CUNA’s America’s Credit Union Conference (ACUC)
  • July 19 – Regulation double-feature, presented by Bill Klewin & Brad Pricer
  • Oct. 4 – 2nd Annual Online Discovery Conference

CUNA Mutual Group insurance, retirement and investment products provide financial security and protection to credit unions and their members worldwide. With more than 75 years of true market commitment, CUNA Mutual’s vision is unwavering: To be a trusted business partner who delivers service excellence through customer-focused products and market-driven insight. More information on the company is available on the company’s website at www.cunamutual.com.

CUNA Mutual Group is the marketing name of CUNA Mutual Insurance Society, its affiliates and subsidiaries, including CUMIS Insurance Society, Inc.  Product availability and features may vary by jurisdiction and are subject to actual policy language. Corporate headquarters are located in Madison, Wisconsin.

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