MADISON, Wis. (11/5/10)--Credit unions can develop sustainable business models that adapt to the “new normal” of both current and future economic shifts, according to John Lass, CUNA Mutual Group’s senior vice president of strategy and business development. Speaking to participants in the Web-based Online Discovery Conference, Lass said it is vital for credit unions to develop long-term business models that adapt to the changing environment produced by the recession. Examining the macro-economic trends related to savings rates, household debt and interest rates is essential to see the big picture, Lass said. As spreads and return on assets (ROA) are challenged, credit unions must reconsider their dependence on interchange and overdraft fees, he said. Lass recommended that credit unions use the DuPont Sustainable Growth Model to help plan their future. The model provides a framework for measuring and breaking down return on equity. Lass said credit unions can pull six “levers” to manage their business. Revenue levers include spread and fee income, while expense levers include loan loss and operating income. There are also asset turnover and leverage levers. Credit unions must weigh which levers offer the greatest control as they seek to develop a harmonious approach to managing all six levers at once, Lass said.