LAS VEGAS (10/8/15)--Credit unions should prepare for an inevitable interest rate hike, National Credit Union Administration Chair Debbie Matz said Wednesday. Speaking at the National Directors Roundtable Conference, Matz also addressed changing demographics and cybersecurity.

Matz pointed out that the agency has an interest rate-risk resources webpage. She encouraged credit union board members to examine interest rate exposure, perform shock testing, develop and update a policy and establish controls to ensure the policy is followed.

Interest rate risk was originally included in the agency’s risk-based capital proposal but was removed from the revised proposal. CUNA recommended the removal. 

Matz also spoke about the importance of credit unions attracting younger Americans as the country’s demographics shift.

“Young demographics are huge potential markets,” Matz said. “Thirty-three percent of the U.S. population is under age 20, yet young demographics are underserved by credit unions. Members between ages 18 and 24 account for just 9% of credit union membership.”

She added, “Older members tend to value the personal touch and stability in their institutions, two qualities that are strengths of credit unions. Younger people place more value on convenience, which they often find in other institutions. They expect a full range of services on their laptops, tablets and smartphones. They expect immediate service. If you don’t offer what they expect, they’ll take their business elsewhere.”

Discussing cybersecurity, Matz called on board members to familiarize themselves with threats that may target credit unions as possible entry points to larger online networks. The NCUA maintains a cybersecurity resources page designed for this purpose.