ATLANTA — With 8,100 credit union partnerships, the Federal Home Loan Bank said they represent its fastest growing segment and can play a big part in reconnecting to struggling global markets.
That was part of the message from Richard Dorfman, president/CEO of the Federal Home Loan Bank of Atlanta, who spoke at yesterday's NCUA Risk Mitigation Summit. The $200 billion wholesale financial institution operates in seven states and the District of Columbia. In Georgia, 1,250 credit unions have partnered with the bank.
"I'll use a bridge as a metaphor that runs between the local, regional or national community. The other side is global debt. It's very disturbing because it is not available to us and fundamentally, it is not available to you," Dorfman said. "Global debt markets want certainty. [Credit unions] have sound principal underwriting. To be safe and sound is second nature to you."
Recommended For You
Building connections with global markets can be beneficial to credit unions. Eighty-five percent of FHLB's profits are passed on to its lending partners through dividends.
Dorfman said credit unions should tout their model more especially as other financial institutions have buckled under bad lending decisions. He encouraged the industry to do away with the "natural frictions" that sometimes exist between large and small credit unions.
"If your name is Navy [Federal Credit Union], that's good. If your name is [a] 'local' [credit union], that's good," Dorfman said. "Study yourselves because you will be called upon by regulators and others who want to know 'how did you do that.'
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
