NCUA Chairman Warns CUs to Be Wary of Rising Interest Rate Risks

AMELIA ISLAND, Fla. – As the Federal Reserve continues to raise interest rates, credit union executives must keep aware of risks, including the risks those rising interest rates, which come with a steadily strengthening economy carry, according to JoAnn Johnson, Chairman of the NCUA Board. Addressing the Southeast Corporate Conference and Annual Meeting, Chairman Johnson said that credit unions are positioned for sustained safety and soundness; however, challenges will require credit unions to monitor risks in consideration of the country's economic condition. "With nearly 3.5 million jobs created since May 2003, home sales climbing to an all time high, productivity at a 9-month high, and manufacturing on the rise, credit unions will continue to play a vital role in ensuring continued growth, while also balancing the risks associated with the institutions' diverse portfolios," said Chairman Johnson. Economic conditions are an integral part in determining the environment in which credit unions operate. It is especially important currently when the direction of the economy is still growing. Chairman Johnson said the agency's capital markets and examination and insurance teams continuously watch and analyze economic developments to ensure that the agency is enabling credit unions to take advantage of presented opportunities, yet to do so in a safe and effective manner.