Insights from Catalyst

A common headline the last year has been the huge influx of liquidity on credit union balance sheets. The question now is what to do with all those extra funds…specifically, where to place them in this historically low rate environment? With so many factors to consider, how do you choose the best course of action?

Weighted Average Life (WAL) can help credit union investors evaluate how long it may take to receive approximately half the outstanding principal and measure interest rate risk associated with fixed-income securities. For these reasons, it’s important to understand how WAL is calculated and examine some of its uses, as well as its limitations.

Recent strong asset growth has diluted capital ratios for many credit unions. Historically, capital positions have been rebuilt by maximizing earnings and shrinking assets. However, one alternative strategy available to Low Income Designated (LID) credit unions is to issue secondary capital.

Today, millions of consumers will make shopping decisions about cereal, chicken, tomatoes, and potatoes. And for many, those decisions will be based on one key factor: convenience.

Nearly halfway into 2021, we are still in the throes of a pandemic-induced low-rate environment, but there are signs of brighter days, growth and a steepening yield curve. Is now the right time to consider servicing mortgages, and if so, what should a potential mortgage servicer consider, given the current market?