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Since the financial crisis in 2008, the interest rates and returns credit unions have been able to obtain through investing excess cash has been at historically low levels. While rates have been near zero, there has been little incentive for management to change their investment methods to increase yields on what has been considered to be “not worth the effort.” Investing in longer-dated maturities has also been viewed as “not worth locking up your liquidity for a few extra basis points.” Thus, many credit unions have maintained cash balances in excess of their actual forecasted and regulatory required needs and invested them in less-than-optimal strategies. Yet, the opportunity for yield improvement is huge, as U.S. credit unions have approximately $1.3 trillion in assets, $400 billion of which is in cash and investments.

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