Even though economists have declared an end to the Great Recession, most credit unions aren’t buying it. Conservative salary, staffing, and benefit plans indicate credit unions are waiting for stronger evidence of economic recovery before significantly increasing salaries or adding staff, according to CUNA’s 2011-2012 Complete Credit Union Staff Salary Survey Report.
With the chronically volatile stock market, inflation fears, low consumer confidence, and weak job growth, even credit unions on solid financial footing are wary of what the future holds.
“I see caution,” says Beth Soltis, CUNA’s senior research analyst. “Much of the data is the same as last year, which tells me credit unions are in a holding pattern.”
Bill Connor, president/CEO of America’s First Federal Credit Union, Birmingham, Ala., isn’t
optimistic about the overall economy, despite his own credit union’s relative stability and ability to weather turbulent times. In a year when the credit union maintained benefit levels and increased wages 4%, Connor still isn’t acknowledging any light at the end of the tunnel.
“I’m not sure it’s going to get much better,” he says of the economy, adding that he thinks his credit union will see a very slow rebound in consumer lending.
“I’m concerned that housing values won’t appreciate much, if any, through the rest of next year,” he adds. “There are some indications the housing market will come back by the end of this year, but I don’t believe it.”
Connor calls America’s First Federal’s situation “collateral damage.” The credit union didn’t get into risky lending, but the collapse of the real estate and lending markets affected the credit union and its members.
In 2005, for example, the $1 billion asset credit union had only three foreclosures. In the past 18 months, however, it has handled 58. Now the credit union has to manage properties, deal with vandalism, and process insurance claims. “We’re not used to managing 40 or 50 properties at one time,” he says. “We had to take someone from collections, and she’s now exclusively managing foreclosures.”
Next: Steady on Wages
A U.S. District judge Monday dismissed three lawsuits--including one by the National Credit Union Administration--brought against U.S. Bank National Association and Bank of America, National Association regarding their duties as trustees of residential mortgage-backed securities.