WASHINGTON – Tightening liquidity fueled by decreasing member deposit growth and increasing loan demand has heightened credit unions' vulnerability to balance sheet risk. The secondary market, offered Callahan & Associates in a recent Webinar, is positioned to help CUs mitigate that risk while giving them the opportunity to increase liquidity.
According to Callahan & Associates industry analyst Tom Geggel who hosted the May 17th Webinar on "Optimizing Performance Using the Secondary Market," credit union share growth fell to a 10-year low as of December of 2005, to 3.8%. He stressed though that this trend is not unique to credit unions. The U.S. as a whole, he noted, experienced a negative savings rate of negative 0.5% resulting from consumers spending more money than saving.
But for the CU industry that trend is coupled with other factors such as declining membership growth.
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