Navigating the New Era of Volatility - How credit union CFOs can lead their balance sheets to stability and optimized performance
The two-year Treasury yield moved from 0.27% to 4.40% in just fifteen months between October 2021 and January 2023. The impact was immediate and widespread. Industry-wide unrealized losses peaked at $41 billion. Liquidity ratios dropped from 18.4% to 11.5%, well below the decade average. Return on assets fell from 68 basis points in 2023 to 63 in 2024. Delinquencies hit 98 basis points by year end, with credit card delinquencies above 200 basis points.Credit unions weathered the storm, but this does not mean they were proactively managing the problem. The consequences are still being felt today. In most cases, the rate cycle moved faster than credit unions could respond, given their tools and processes, and the result is compressed margins, decreased liquidity and a significant...