c. myblog

March 6, 2014

Make “Silo” Thinking a Thing of the Past: A/LM Education and Decision Filters

One of the challenges of running a successful credit union, and any business for that matter, is “silo” thinking in which talent is focused solely on individual areas and has lost sight of the bigger picture. Making decisions in isolation can be detrimental to the overall success of an institution. However, effective A/LM education and […]

February 27, 2014

NEV: Things to Remember

Net economic value (NEV) will not show you the effect on current earnings when testing risk-mitigating strategies. To illustrate, assume a credit union concerned about its interest rate risk is considering selling all of its 30-year, fixed-rate, 1st mortgages. The credit union plans to put the proceeds into overnights to give themselves the best hedge […]

February 20, 2014

c. bit: Please don’t “Frankenstein” your Asset/Liability Management Policy

Over the years we have reviewed many credit union A/LM policies. One of the biggest issues we’ve found is that often the policies are “Frankensteined” from various sources. We are reminded of this currently as credit unions are writing policy with respect to liquidity management and contingency funding plans. Why does this happen? Our theory […]

February 13, 2014

Qualified Mortgages, More Than Just a Compliance Issue…

As of January 10, 2014, the “Ability to Repay and Qualified Mortgage Standards under the Truth in Lending Act (Regulation Z)” went into effect. Beyond the added compliance burden this will have, consider how this rule could impact strategy, interest rate risk and earnings at individual credit unions, and for the financial services industry as […]

February 6, 2014

Is Now a Good Time to Increase Deposit Rates?

Over the past few weeks there has been some increased discussion in ALCO and board meetings about increasing deposit rates in the near future. Some credit unions have already increased deposit rates, while other decision makers are feeling pressure to do so. Although short-term Treasury rates, which typically drive deposit rates, have changed very little […]

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