c. myblog

August 5, 2016

Interest Rate Risk in an Auto Loan – Really?

The competitive landscape for auto loans has fundamentally changed over the last 15 years.  There are more non-traditional lenders vying for autos and non-credit union lenders have been saturating the indirect lending market. These trends put pressure on pricing and take a bite out of the auto lending pie.  As a result, financial institutions are […]

July 6, 2016

NCUA – Rethinking NEV

It’s no secret that the NCUA is planning to implement new guidance for net economic value (NEV) testing this year. From NCUA’s recent open meeting, some key elements of the new guidance include: Non-maturity deposit (NMD) values will be capped at a premium, not to exceed 1% in the current rate environment. NMD benefit will […]

May 12, 2016

5 Things Not To Do With Your Investment Strategy

1. Don’t manage investments in a silo. Investments are an integral component of the business strategy. Investment strategy should be developed in light of a credit union’s unique financial structure and strategic objectives. Understand how the whole financial structure works together. For example, if the lending portfolio includes a significant amount of long-term loans, investments […]

March 3, 2016

c. notes – Aggregating Risks to Inform Strategy

To remain successful as the world changes and becomes more complex, risk management processes must keep pace. Risk management begins with identifying and quantifying strategic risks. An effective process also recognizes that it is not adequate to only quantify and understand risks in silos. Risks should also be quantified and understood in aggregate. As history […]

January 28, 2016

Interest Rate Risk Policy Limits: One Big Misconception

We often see interest rate risk policy limits that rely too much on net interest income (NII) volatility and miss the absolute bottom-line exposure. Such reliance can cause boards and managements to unintentionally take on more risk than they intended. Why? Because these types of policy limits ignore strategy levers below the margin. Establishing risk […]

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