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CU model can weather economy Louisiana CUs told
HARAHAN, La. (1/20/09)--Credit unions have the ability to weather a bad economy, said a Credit Union National Association (CUNA) economist at the Louisiana Credit Union League’s 2009 Economic Outlook program. Steve Rick, CUNA senior economist, opened the program by sharing his insights on the economic outlook and its impact on credit unions, highlighting the many challenges they will face in the coming year. Challenges include the fear of a wrenching recession and possible deflation, rising unemployment, falling home prices, and the financial stimulus package that will soon be implemented by the government. However, the overall the credit union cooperative model is well-suited to weather the economic turmoil, he added. The program aimed to help attendees better understand the current economic situation, where the nation is headed for the rest of 2009, and what the economic struggle will mean to credit unions and their members.
Louisiana Credit Union League’s (LCUL) 2009 Economic Outlook program panelists included (from left): Mike Hooper, chief financial officer, La Capitol FCU, Baton Rouge; Jon Flagg, supervisory examiner, National Credit Union Administration; Donna Wagoner, president/CEO, Ouachita Valley FCU, Monroe; Rhonda Hotard, president/CEO, Louisiana FCU, LaPlace; and panel facilitator Susie Fair, LCUL vice president of member services. (Photo provided by the Louisiana Credit Union League)
One of the program’s highlights was a panel discussion, facilitated by Susie Fair, LCUL vice president of member services, in which panelists shared their perspectives on how current economic conditions will impact credit unions in Louisiana. Panelists included: Mike Hooper, chief financial officer of La Capitol FCU, Baton Rouge; Rhonda Hotard, president/CEO of Louisiana FCU, LaPlace; Donna Wagoner, president/CEO of Ouachita Valley FCU, Monroe; and Jon Flagg, supervisory examiner, National Credit Union Administration (NCUA) . Attendees presented questions to the panelists and each panelist shared thoughts on topics including:
* Specific challenges credit union members are facing during difficult economic times, including delinquency or collections issues; * Asset liability management (ALM) strategies; * NCUA’s exam focus and how it has shifted as a result of the current conditions; * The importance of having a liquidity contingency plan; * Membership growth strategies; * Any impact on credit unions’ credit card portfolios; and * Human resources and hiring opportunities for credit unions.
On the state level, Loren C. Scott of Loren C. Scott & Associates, Inc., former chairman of the Economics Department at Louisiana State University, discussed the opportunities and challenges that Louisiana’s seven metropolitan areas are facing. In the closing session sponsored by Southwest Corporate FCU, Dr. Charles Idol of Asset/Liability Management Consulting & Research, reviewed credit union ALM trends. He noted that rapid share growth and low earnings diluted equity ratios; real estate lending continues to dominate; investment portfolios grew rapidly in 2008; and delinquencies through the third quarter of 2008 were higher in all categories of loans. Idol reviewed projections for Gross Domestic Product growth through 2009, discussed major issues plaguing the economy, and shared his rate outlook for 2009. He made recommendations for ALM strategies for 2009 and shared lessons learned from the credit crisis.
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