Credit Union

NEV Supervisory Test Update – September 2022

The NCUA Supervisory Test is intended to be used to measure asset sensitivity to rate changes by applying standardized market values to the credit union’s non-maturity shares. In early September the NCUA updated its interest rate risk supervisory framework to address concerns about the test's results.

Liquidity Crunch: Ideas to Stay Afloat

Now that we find ourselves in a more attractive rate environment credit unions have a golden opportunity to improve net interest margins and loan-to-share ratios – if only they had the liquidity to support it. This article offers ideas to help your credit union meet liquidity targets. 

Bond Meltdown Offers Highest Investment Rates in 15 Years

Over the last nine months we have seen the biggest yield curve shock in over twenty years. After the CPI print for May came in at a higher than expected 8.6% year-over-year rate, the yield curve has rocketed even higher and we are seeing red across virtually all bond prices.

Understanding the Unrealized Loss on Available-for-sale Securities

Unrealized losses are accumulating to very high levels for a few reasons: 1) Interest rates moved up a lot in the last year, causing market values on current investments to plummet, 2) investment portfolios are a larger portion of overall assets than normal, and 3) there is a broad precedent to hold most CU investments as AFS in the industry. Why?

What’s new with CU Clarity, our CECL Warm Solution – Q1 2022 Release

High Level Release Notes

• TDR & Impaired screen has changed to Specific Reserves, to adjust for FASB changes to TDR Requirements. Read more below....
• A new feature to calculate weighted average remaining maturity values for each loan pool based off your loan-level information, creating a CECL reserve precise to your credit union. Read more...
• Verbiage improvements throughout the application, based off user feedback, to promote better understanding and use of the product.
• CU Clarity will be undergoing a name change to Accolade Analytics to better represent the future vision of the product. You will see this name change happening slowly, but this will not impact how you use the tool.

Stabilize Investment Income with Strategy

Investment strategy can be intimidating when rates are moving. Credit Unions are not compensated to speculate on interest rate moves, nor can anyone perfectly time the market. A sound investment strategy should be part of a wholistic balance sheet strategy that ensures stable income regardless of the rate environment.