Exchange highlights top finance issues

Finance leaders tackled topics ranging from Bitcoin to coin counters Sunday at the 2022 CUNA Finance Council Conference in Las Vegas.

Moderating the session were Steve Arbaugh, executive vice president/chief financial officer (CFO) at $4.6 billion asset SECU of Maryland in Linthicum, and Brad Barnes, CFO at $782.5 million asset Air Academy Federal Credit Union in Colorado Springs, Colo.

Topics of interest included:

The net economic value supervisory test, which measures balance sheet risk. While asset growth due to increased deposits has strained capital ratios, “it comes down to what your balance sheet looks like,” says one attendee.

Charge-offs. Members’ credit quality has been excellent overall, despite fears over rising charge-offs due to the pandemic. But concerns over a recession are causing some credit unions to re-examine their credit decisions.

Interest rates. The mortgage pipeline has slowed considerably due to rising rates, while auto loan rates have been slower to rise. “It’s a rate-sensitive market.”

Marketing. The average age of credit union members is 47, and credit unions need to attract younger consumers. Connecting via athletics is one approach that works.

Community impact. Community service collaborations among credit unions have been successful. “We need to show up together as credit unions and go after banks’ market share,” says one attendee.

Hybrid work model. While many leaders would like employees to return to the office, employees feel differently. Some branch employees feel slighted because they have to work in person while those who work at headquarters don’t.

Holding periodic in-person staff meetings may provide a partial solution.

Attracting and retaining staff. Credit unions must find creative ways to find and keep talented employees. While keeping staff happy is important, “ultimately, money talks,” says one attendee.

Some new employees are making close to what tenured staff earn.

Interactive teller machines (ITMs). Attendees differ on the effectiveness of ITMs. One credit union implemented ITMs—just to remove them two years later.

Others, however, have removed tellers entirely due to ITMs.

Bitcoin. Credit unions want to serve the many members who have purchased cryptocurrency, but reputation risk is a big concern.

Overdraft fees. More credit unions are reducing these fees. Many members rely on overdraft protection, and it can be a good source of revenue for credit unions. 

One participant reduced overdraft fees from $27.50 to $15 and marketed that decision. As a result, the higher volume resulted in income gains.