CUNA Economists Hold Economic Funeral
NEW YORK -- For the most part, they weren't wearing black.
But most everything else about the presentations of CUNA's top two economists during America's Credit Union Conference and Expo was laden with doom and gloom.
CUNA Senior Vice President and Chief Economist Bill Hampel and Vice President of Economics and Statistics Mike Schenk said that the recession could last into next year. During that time there will be slower loan growth and a significant increase in loan delinquencies and losses.
Though only Hampel's shoes were black, his overall mood was gloomy. Credit unions will be hurt, though not as much as banks, he said. Credit unions are feeling the collateral damage from the mistakes of others that triggered the subprime crisis and the recession.
"The negative effects were not caused by credit unions and are not likely to be long lasting for them," he said.
Schenk said the pain and suffering is not over, in part because there is lower pent up demand for many products, interest rates are higher, there are fewer investors and home prices will continue to be lower.
Hampel said credit unions can improve things by taking several steps to help themselves and their members.
He urged credit union executives not to penalize their members for the bad economy and take advantage of the credit crunch by reaching out to those having trouble getting loans from banks.
Credit unions should use some of their capital cushion to avoid raising fees and loan interest or reducing interest paid on accounts, he said. Also, credit unions can find additional revenue by lending to people with good credit who have been shut out by other financial institutions.