The inverted yield curve is the primary reason most funds are going into overnight accounts. There is very little incentive for credit unions to go further out on the curve. Wirthmann said there is also caution among credit unions that went out longer on the curve last year and then saw lending pick up. "As summer came they had an outflow of funds and found themselves in an illiquid position and needing to borrow," he said.

Southeast also experienced $120 million growth in its term portfolio during March so credit unions are going out somewhat on the curve, mostly six months to a year and a half, said Wirthmann.

Members United Corporate has experienced a 55% growth in overnights and a 23% growth in certificates from January to March. "A lot of credit unions don't feel like going out two to three years if they don't see the interest," said Ron Koza, chief investment officer for Members United, who cautions CUs not to disregard their investment plans, whether it's based on a total return or a laddered structure, because of the great overnight rates. But he also believes keeping more liquidity short makes sense given that the slow loan demand CUs are seeing now will change. "Instead of putting it out in five-year term investments, try to keep some of your liquidity shorter term. I still think it is a good move to put some money out 18 months to two years."

Koza believes Members United and corporates in general are starting to make inroads against regional brokers who have deep ties with many credit unions for brokered securities. "We've been able to capture a lot of their investments, displacing regional brokers. We're doing some types of mortgage replacements, the balloon mortgage pools. Been more demand for straight agencies." Members United has an in-house broker dealer, Balance Sheet Solutions.

Corporate One Senior Vice President of Asset Liability Management Tammy Cantrell said Corporate One has seen the strong share growth of other corporates and is also experiencing solid off-balance sheet business, particularly with the SimpliCD program. "There's been significant interest in callables as well as short-term bullets. With the exception of structured deposits we're not seeing credit unions going out much longer than 18 months."

Cantrell is a believer in credit unions sticking to their ladders, but she thinks credit unions can do well staying short. "I have always been a fan of credit unions going with their ladders, however I think this is one of the longest periods we've experienced an inverted yield curve. I don't see the Fed changing any time with the next couple of meetings. It's hard to give up that yield. Nonetheless, if you have a discipline you should stick to it."

She noted that Corporate One is celebrating becoming the fourth largest corporate in the nation. It was the 10th largest just seven years ago. Corporate One added 50 new members last year. "We've grown really through organic growth, calling credit unions and adding new members and getting more deposits from existing members," she said. The nation's largest corporate, WesCorp, saw its largest month for certificates ever, attracting approximately $2.6 billion. Overall balances increased 48% since August. WesCorp has booked $5.5 billion in certificates since January, with $2.9 billion maturing during that time. Bob Burrell, executive vice president and chief investment officer for WesCorp, warns CUs to remember the lessons of 2001′s inverted yield curve when too many CUs stayed short too long. "The whole point of laddering is to avoid timing decisions. Now is not a good time to abandon that," said Burrell. –[email protected]