An increasing number of executives are pessimistic about the 2013 outlook for their credit unions because of more regulations, low interest rates and a weak economic recovery, according to a Web survey of 271 credit union leaders by Abound Resources, an Austin, Texas-based management consulting firm.
The survey found that 25% of credit union executives are either somewhat or very pessimistic. Last year, the Abound Resources survey found only 16% of credit union executives were either somewhat or very pessimistic in 2012.
“CEOs are clearly frustrated with the cost and hassle of regulations coming out of Washington and are fearful of future developments from the Consumer Financial Protection Bureau,” the survey report states. “The sluggish economic recovery also weighs heavily on the minds of CEOs, but, in our conversations with clients, it’s the regulatory burden and the fear of the unknown that is keeping them up at night.
“The realization that the Dodd-Frank Act and the Consumer Financial Protection Bureau are here to stay – and worse than originally imagined – have been the biggest contributing factors to the more pessimistic outlook.”
Despite the growing pessimism among credit union executives – CEOs, COOs, CIOs, CFOs and compliance executives – 37% are still very or somewhat optimistic in their outlook for 2013, compared to 43% in 2012. The remaining 38% expect the New Year to be the same as the old year.
The survey report, however, doesn’t address why nearly 40% of executives hold an optimistic outlook for their credit unions. Nevertheless, executives have set their top five growth priorities to increase consumer loans, expand Internet/mobile banking, improve sales and marketing methods, grow mortgage loans or mortgage originations and increase member business loans.
The top five cost savings priorities among credit union executives in 2013 are streamlining workflow, improving efficiency ratios, reducing reliance on paper, renegotiating vendor contracts and cutting back on branch-related expenses.
Within the financial and risk management realm, according to the survey, executives said their top five priorities are addressing regulatory compliance requirements, improving capital ratio, replacing NSF/OD income with other fee income sources, improving investment management policies and processes and improving lending policies and processes for better risk management.