LAS VEGAS — Pressures on net interest margins show no sign of change in the months ahead "with little on the horizon that would push longer yields higher," according to a top Callahan & Associates executive and economist.

Addressing the annual National Directors' Convention here, Melanie El-Sabaawi, executive vice president of the Washington consulting firm, stressed also that in the months ahead control of operating expenses "will be a critical factor differentiating credit union performance."

Today's consumer, she said, is looking "increasingly stressed by a high debt load that is heavy by historical standards." There has been little movement in wages with rising prices, she said, and as a result consumers are not saving "and they may not be able to borrow much more either."

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"This situation won't last forever but it will test some credit unions," she told the gathering.

The Callahan economist said consumers' overall appetite and ability to take on new debt "will decelerate from here," but CUs can still grow their portfolios by taking share from other lenders because they offer overall better value.

"Some examples of competitive value include offering better loan pricing and terms, offering superior convenience including point of sale lending and niche products," she concluded.

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