Insights from Catalyst

Over the second quarter of 2022, interest rate risk has seen pronounced movement, with many credit unions concerned about the impact on the NEV Supervisory Test. The 0.75% increase in the Fed Funds Target Rate at the June Federal Open Market Committee meeting, due to a hot CPI print, came to the markets somewhat unexpectedly (another followed in July).

At the beginning of 2022, the NCUA instituted the Subordinated Debt Regulation which replaced the Secondary Capital Rule. This regulation permits credit unions to issue subordinated debt as a way to boost their capital position. As more credit unions look to issue subordinated debt, you are likely to see opportunities to invest in these credit union-issued subordinated debt notes.

Is your credit union considering an investment in Subordinated Debt? If so, carefully evaluate your potential issuers. Five key areas can help determine their strength: growth trends, loan quality, earnings capacity, liquidity, and planned use of funds.

Today’s financial services market is more competitive than ever. For nine years, I have worked as an Asset & Liability Management (ALM) Consultant at Catalyst. To ensure our services continue to surpass those delivered by our competition, Catalyst encourages ongoing education. As such, I decided to extend my credit union education starting this July in Fort Worth, Texas.

Human exploitation, lost/stolen credentials or scams that compel consumers to divulge or expose personal information keep payments fraud on the rise. Fraud via lost and/or stolen credentials alone increased nearly 80% over 2020, according to a 2022 Identity Fraud Study from Javelin Strategy & Research. With the addition of scam-related fraud, losses totaled $52 billion and affected 42 million U.S. adults.