3 Ways the Fiscal Cliff Could Impact CUs
Industry economists agree that should the U.S. plunge off the fiscal cliff Dec. 31, credit unions probably won’t see any ill effects right away.
However, the Credit Union Times spoke with five industry economists who identified three ways a Grand Bargain, or lack of one, could have a big impact on credit union balance sheets.
Worth said liquidity could go either way: consumers could take a flight of safety out of equities markets and into federally insured money market accounts. However, if the economy sours and taxes increase, they would have less money to deposit, so it could be a wash. Turner agreed that liquidity is unlikely to be affected by fiscal cliff issues, because even if taxpayers have fewer refunds and year-end bonuses to deposit, loan outflow is still weak, so seasonal liquidity trends and loan-to-share ratios wouldn’t be greatly impacted.