Liquidity Ratios on Rise

LAS VEGAS – Credit unions continue to experience a rise in liquidity with loan-to-share ratios at 75%, up 3% from a year ago, according to a WesCorp.funding executive. Addressing the annual meeting of CU Direct Corp. here, Dietmar Huesch, vice president of treasury and funding for the San Dimas, Calif. corporate, said a further climb in interest rates is certain to make the liquidity squeeze even tighter. In his remarks to a breakout session on liquidity, Huesch listed several alternative funding options or remedies available to CUs ranging from liquidating investment portfolios and using repossession agreements to relying on government borrowings and asset securitizations. All of these options, he said, require advance work and planning by top management before seeking out these remedies. Circumstances will vary greatly for each CU, he said but still, borrowing from the local corporate remains “often the most economical” alternative for building needed liquidity, said Huesch.