Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
CUs can sustain growth if they adapt to new normal
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.
Other Resources

RSS





print
News Now LiveWire
National #LouiseHerring awards for #creditunion philosophy in action selected #NewsNow http://t.co/two4z5lBAU
16 minutes ago
#NewsNow: @CUNA-CFA survey results suggest 3-3.5% increase in holiday spending. http://t.co/GjcDvvwfzy
17 hours ago
.@WOCCU promoted financial inclusion as a sustainable development goal at two separate @UN events this month.
18 hours ago
Colo. authorities OK first-ever #marijuana-focused CU #NewsNow http://t.co/77qj6O3bcu
18 hours ago
.@Vancity busts some Black Friday retail myths http://t.co/q8Wht3CcRc
19 hours ago