Credit Union Weekly News !
Anurag Mukherjee
Credit Union & Community Bank C-Suite Advisor | P&L and GTM | Data Scientist | Fintech Advisor & Podcaster
?CUNA’s economists have published a new economic report that features two “main changes” from its earlier forecasts: it is going to take longer to tame inflation than had previously been predicted—meaning rates will stay higher, longer-- and credit unions will experience a “pronounced earnings challenge.”
?According to CUNA Senior Economist Dawit Kebede, in the new year credit unions are likely to have to continue to pay up to manage their tight liquidity positions. That is taking place at the same time the economy continues to be resilient in 2023, said Kebede, noting CUNA has increased its projection for economic growth to 2.5% for this year, up from 2%.
Kebede noted third quarter GDP has been rounded up to 5.2% from 4.9%, which he said represents “big and robust economic growth,” reflected by a labor market that shows signs of moderation but remains strong.
Approximately 60 credit unions in the U.S. have been hit with outages due to a ransomware attack on Ongoing Operations, a unit of St. Petersburg, Fla.-based Trellance.
NCUA has confirmed the attack and in a statement to the media said it is “coordinating with affected credit unions” in response. One of the credit unions affected is the $52.5-million Mountain Valley FCU in Peru, N.Y.
In a statement on the CU's website, Mountain Valley FCU CEO Maggie Pope states, “As of today, MVFCU’s data processing system remains non-operational. Our data processor is working diligently around the clock to get them back online. Due to the number of credit unions across the country that have been affected by this, we are seeing a longer resolution time for when the system will be back up. We are hopeful that it will be soon.”
The credit union said the only services affected are online and mobile banking and that debit cards and other systems are functional.
A ransomware attack that began Nov. 26, impacting dozens of credit unions across the country, continues to hamper the operations of many credit unions that are clients of Ongoing Operations, a unit of Trellance Cooperative Holdings.
Citizens Equity First Credit Union (CEFCU) announced Friday that it had paid members a $40 million special dividend.
The payout on Friday by CEFCU of Peoria, Ill. ($7.4 billion, 391,451 members) represents about $102 per member and 53 basis points of its return on average assets of 0.80% for the 12 months ending Sept. 30.
The amount each member received was determined by dividends earned and interest paid during the first 11 months of the year.
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Over the last 23 years, CEFCU’s board had decided to return $455 million in Extraordinary Dividends to members, most of whom live in Illinois and California. Last year’s payout was $35 million, the second largest among the 55 credit unions in last year’s CU Times tally.
The pending arrival of $3.9 billion-asset United Federal Credit Union into the Pennsylvania market could cause disruption to member acquisition, lending opportunities and talent procurement efforts for the state's banks and credit unions.
Last month, St. Joseph, Michigan-based United announced plans to merge with Allentown, Pennsylvania-based Gold Credit Union in a deal expected to be finalized in the spring of 2024
Cheryl Bartholomew, president and CEO of $147 million-asset Gold, said the deal will give the credit union's 9,300 members access to products they have been requesting including business and commercial accounts.
Credit card charge-offs were elevated in the third quarter of 2023 for the largest credit unions in the country — in some cases significantly — as consumers struggled with rising inflation and evaporating savings.?The top 10 largest credit unions in the U.S. by assets all saw a year-over-year?increase in charge-offs?in their credit card portfolio at the end of the third quarter, according to an analysis of National Credit Union Administration call report data by American Banker.
In many cases the increase was substantial. For example, $168.4 billion-asset?Navy Federal Credit Union?— the largest credit union in the world — experienced a 68% year-over-year increase in credit card charge-offs, to more than $1.1 billion, through the third quarter. Navy Federal did not immediately respond to a request for comment.
?The NCUA will release its comprehensive quarterly data for the entire industry in mid December.
Credit card charge-offs for the $17.1 billion?Suncoast Credit Union?rose 79%, to almost $36 million, through the first three quarters of 2023 compared to a year earlier. Total credit card loans outstanding also rose to $1.1 billion, a 24% increase from the third quarter of 2022
Chartway Credit Union President/CEO Brian Schools, who will chair the transition board of America’s Credit Unions, wrote that credit unions are the best friend a consumer can have when it comes to securing a financial future. Writing in The Virginian-Pilot, Schools said credit unions exist to make member dreams and goals a reality.
“Your credit union is the best friend you can have when it comes to creating the secure financial future you deserve because we’re different in several crucial ways,” he wrote. “First and foremost, we’re member owned. We’re a best friend who puts you first because we are you — a group of like-minded individuals who share the same concerns and challenges. Your elected volunteer Board of Directors represents you, and they work to ensure that we all thrive together.
Source : American Banker, CUTImes, CUInsights, CUtoday Info
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11 个月Thanks for sharing a good snapshot of what's going on. The ransomware attacks are troubling. What do you think can be done?