Resources

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  • Unsecured Loan Participations: Getting a Handle on the Risk

    Jun 28, 2021 | Lorena Paredes

    With loan demand down and cash deposits up, buyer demand for unsecured loan participations has increased over the past year, and many credit unions are broadening their loan participation policies to include unsecured loans. Although a great option for higher-yielding assets, it’s important to analyze the associated credit risk factors.
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  • Unsecured…to be, or Not to be? That is the Question.

    Apr 30, 2021 | Jeff Hamilton

    Before the pandemic era, interest in unsecured loan participations was minimal. However, in recent months, the Member Credit department at Catalyst Corporate has received increased inquiries from buyers looking for any type of loan participations, including unsecured loan portfolios.
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  • As Painful as it May Be…Invest!

    Jan 4, 2021 | Leah Schlangen

    Since March 2020, we’ve received many questions regarding the economy, market and rates. With so much economic and COVID-19 data available, it is hard to synthesize everything and come up with one conclusive answer regarding the future or what the new “normal” may be. The new normal for credit unions will vary depending on membership base, asset size and services offered. However, one aspect we must adjust to is the low interest rate environment.
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  • The Gifts of 2020...

    Dec 21, 2020 | By Chris Shipman, CFA, CFP®

    If the year 2020 could be characterized, I would relate it to Uncle Eddie, from National Lampoon’s Christmas Vacation – great intentions, but always seems to say or do the wrong thing. As we reflect, the year started with great intentions. After all, we were in the longest bull market in U.S. history, with no real end in sight. Then the pandemic hit, and it has been the gift that keeps on giving.
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  • The Basics of Backtesting

    Dec 18, 2020 | Theresa Batoon

    At one time or another, you’ve probably heard the term “backtesting” from your auditors or ALM provider. Backtesting is simply the comparison of your actual income statement to your projected income statement. This technique can provide valuable insights into the accuracy and reasonableness of your interest rate risk model.
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  • What Will it Take for Mortgage Rates to Rise?

    Dec 7, 2020 | Zane Wilson

    You’ve likely seen articles predicting that mortgage rates will rise in 2021. The rationale for these predictions is complex, but when I think about the direction of mortgage rates, there is really only one major factor I consider: economic growth. However, for mortgage rates to increase, one final variable must be realized: the 10-year Treasury yield needs to rise above one percent and remain within a range of 1.33-1.60 percent.
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  • Examining Investment Decisions Based on the Yield Curve

    Nov 30, 2020 | Casey Peterson

    The year 2020 has been like no other, and the financial services industry – like most – has felt its share of turmoil during the COVID-19 pandemic. Credit unions have endured a nationwide lockdown, modified branch activity and accelerated timelines for digital solutions and online banking. Over the last eight months, two major economic byproducts have also emerged: 1) deposit/share growth and 2) record low interest rates.
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  • The (Tur)Key to Understanding Asset Liability Management

    Nov 23, 2020 | Maryssa Crews

    Asset liability management (ALM) can be somewhat daunting. You may be wondering, “What is the best way to allocate the balance sheet to minimize risk and optimize earnings?” To fully grasp ALM, you need an understanding of different types of risk and how the balance sheet composition affects those risk levels. With the holiday season fast approaching, it may be helpful to compare risk assessment tools to a Thanksgiving feast.
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  • SOFR So Good, but Transition from LIBOR Will Come with Risks…

    Nov 16, 2020 | Dan Abdill

    In the U.S., LIBOR’s “heir apparent” is the Secured Overnight Financing Rate (SOFR). Regardless of the chosen benchmark, transitioning from LIBOR has its risks. In July 2020, the Federal Financial Institutions Examination Council (FFIEC) – of which the NCUA is a member – released its “Joint Statement on Managing the LIBOR Transition.” The statement enumerates the types of risk examiners will focus on but does not endorse a specific replacement benchmark.
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  • FOMC Guidance Sets New Tone for Future Rate Forecasting

    Nov 9, 2020 | Jonathan Jackson

    In late August, a new update to FOMC policy framework was introduced which included a major shift in strategy for potential rate hikes. In an effort to provide further clarity, the FOMC issued explicit guidance, reinstating its commitment to leaving rates unchanged until the new set of economic parameters is met. Here's a closer look at the new criteria.
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    Clearing Loan Participation Hurdles without Breaking Stride

    Jul 11, 2019 | Mark DeBree, CFA

    Is liquidity tight and loan demand strong at your credit union? In the past, you’ve likely looked at selling loan participations to ease liquidity and create balance sheet capacity for continued loan demand. However, as interest rates rose, you may have been hesitant to enter into a loan participation sale due to potential pricing below par. But with the potential for falling interest rates ahead, are there reasons to revisit this decision?
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    What to Consider when Selecting Liquidity Management Solutions

    Mar 28, 2019 | Kathy Gensler

    With total loans/shares on the rise and interest rates uncertain, liquidity management can be challenging. Squaring away available funding sources and stress testing your credit union's liquidity are two essential components of effective liquidity risk management.
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Need Liquidity? The Loan Participation Exchange Is Your Ticket

by Catalyst Corporate | Feb 17, 2023
With tightening liquidity, many credit unions are struggling to meet consumer demand for loans while positioning themselves for future growth and safety. One way credit unions can access adequate liquidity is to sell loan pools. Loan participations allow credit unions to manage their balance sheet composition, concentration limits, loan-to-share ratios, interest rate risk and liquidity levels.

How the Loan Participation Exchange works

Catalyst Corporate’s loan participation team works closely with credit unions throughout the loan selling process. The Catalyst sales team is your credit union’s key to unlock and utilize the innovative, online Loan Participation Exchange (LPX). LPX is designed to help credit unions execute fast, safe and secure transactions in an online marketplace.

With Catalyst as your partner, the LPX is simpler than ever to use. If needed, the Catalyst loan participation team can also help with the monthly remittance process, reducing the ongoing back-office responsibilities that come with selling loans. With the benefit of the LPX as the gateway to the loan participation market, credit unions can enhance balance sheet management, have greater control over loans and focus on serving their members.

The loan participation program

For years, Catalyst Corporate has been serving the loan participation market by facilitating billions of dollars in loan participations and by working with credit unions of all asset sizes across the industry. Furthermore, this program keeps 100% of the funds within the credit union industry, ensuring the benefits are all retained by credit unions. By doing this, credit unions grow more and continue living out the people helping people mantra.

Amidst the current, ever-changing economic environment, it’s important to have options. Whether or not a credit union is ready to execute a loan participation, having the tool ready and available when the time is right, allows credit unions to keep the option in their back pocket.

Secure your loan-selling ticket with LPX

Despite the economic environment, credit unions are still buying and selling loans. If your credit union needs liquidity, Catalyst makes selling loans simple and easy. The LPX allows credit unions to access the resources they need without having to devote all their time and resources to solving the problem.

Secure your loan-selling ticket by contacting the Catalyst Corporate team. Our team is ready and eager to show your credit union what LPX can do for your balance sheet.