SAN DIMAS, Calif. – The historically low interest rate environment along with a rapid growth of fixed-rate mortgage portfolios and recent changes to the Federal Reserve Bank lending procedures, has lead WesCorp to expand the range of its liquidity and interest-rate risk management tools. The $23 billion corporate also reduced the cost of this funding, so as to provide the most competitive rates available to its members. WesCorp now offers both fixed- and floating-rate term advances out to a final maturity of 12 years, and is able to customize the terms to meet a member’s individual needs. Members can add caps and floors, call and put features, or just about any type of cash flow or interest-rate option. “It’s already well known that WesCorp structured certificates pay anywhere from 10 to 35 basis points more than a comparable Agency security,” said Bob Burrell, Executive Vice President and Chief Investment Officer. “We’ve now taken the infrastructure and risk management technology developed for our investment products and applied it to a wide range of credit products.” According to Burrell, there are two main reasons why WesCorp is at this time making the move to enhance the competitive position of its loan products. The first relates to the Federal Reserve Bank. As of January 9, 2003, the Fed restructured the operation of its discount window borrowings, making it easier for a credit union to borrow funds. However, at the same time, the Fed also raised the cost of these funds to 100 basis points above the fed funds rate. The second reason is the increase in credit union residential mortgage loan portfolios. “We think credit unions will want to match-fund some of these assets in order to mitigate some of the interest-rate risk,” said Burrell. He acknowledges that this is particularly critical since these assets are being booked with historically low coupon rates. When interest rates eventually rise, they will squeeze future net-interest margins on these assets. In addition to taking down fixed-rate advances, members can utilize WesCorp’s “fast track” derivative hedging program to lock-in today’s low rates on member share and certificate accounts.

Complete your profile to continue reading and get FREE access to, part of your ALM digital membership.

Your access to unlimited content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including and

Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2023 ALM Global, LLC. All Rights Reserved.