c. myblog

June 3, 2011

NEV And Net Worth Are Not The Same

Reminder: While net economic value (NEV) and net worth represent two completely different concepts, they are often used incorrectly as interchangeable terms.  Even NCUA sometimes adds to the confusion.  In the April 2011 NCUA Report¹, an article on rising interest rate risk gives an example of a credit union with $5.5M in long-term, fixed-rate mortgages […]

May 24, 2011

Hot Money In Waiting

Many credit unions continue to see higher levels of deposit growth despite lowering rates—and even a rising stock market—as members choose safety and certainty over return.  While the flight to safety has been discussed at length, the gradual shift from CDs to share products has received less attention. Over the past 6 to 12 months, […]

May 13, 2011

Proposed IRR Regulation Could Have Unintended Consequences

C. myers agrees with the objective that most institutions should have an effective interest rate risk (IRR) management policy supported by an effective IRR program.  However, we do not agree that it should be regulation. Keep in mind as you read our comments that our business is to provide asset/liability management services to financial institutions.  […]

May 6, 2011

Planning For PLL

Given the economic experience of the past couple of years, many credit unions were forced to beef up their loan loss reserves.  Now, as things appear to be getting better, we are seeing that some credit unions feel they are “overfunded” and are not adding to their reserves.  While this may provide some temporary relief […]

April 29, 2011

Caution: NCUA’s Proposed Regulation On IRR Could Have Unintended Consequences

You think you are already doing everything required in the proposed Regulation.  You think your policy limits are appropriate for your strategy and business model—but will the examiner making the judgment as to whether your credit union is in compliance think the same? NCUA’s proposed shift from Advisory to Regulation is concerning. It raises several […]

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