Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CUNA economic update A look at corporates
WASHINGTON (10/21/09)—Within an extensive economic update and outlook on credit unions presented this week at the American Institute of Certified Public Accountants Conference on Credit Unions in Chicago, Bill Hampel shared his insights on the corporate credit union situation. Hampel is chief economist of the Credit Union National Association. First, Hampel said, significant losses in the Western Corporate CU and U.S. Central Corporate CU portfolios will occur over the next one to five years. However, the actual amount of those losses, Hampel noted, depends on the future course of interest rates, the economy, housing markets, and housing finance. Because of this, the rate and depth of future losses are “unknown, and unknowable.” Hampel noted that GAAP, or Generally Accepted Accounting Principles, unfortunately require a single number representing loss estimates for financial statement purposes. Because there is no way to have any confidence about what that number is, GAAP is a misleading way to deal with the situation. On the economy, Hampel noted that the nation’s general economic trends that will affect credit unions in the near term, and said that the country’s freefall has ended and predicted a return to modest growth. However, the bad news in unemployment figures is not over, Hampel said, anticipating that the unemployment rate will continue to “drift up.” In this context, credit unions can expect continued strength in savings growth and weak loan demand. High loan losses will continue to place downward pressure on earnings. Overall, he added, although the worst is behind us, for the near term credit unions are facing a “fragile low-growth economy.”

RSS print
News Now LiveWire
Economic activity slowed in June, according to the #Chicago Fed's national activity index, released today #Market
13 hours ago
Money burns a hole in workers' pockets after payday, despite best intentions via @WSJeconomy
13 hours ago
"SAR Stats," new from #FinCEN, focuses on #bitcoin. See #NewsNow
14 hours ago
.@CFPB now accepts consumer complaints on prepaid cards, debt settlement services, credit repair services, and pawn and title loans.
15 hours ago
.@WellsFargo to process transactions in order received, not high to low
15 hours ago