NCUA top economist addresses 2015 outlook, risks in new video

March 31, 2015
ALEXANDRIA, Va. (4/1/15)--Most credit unions should see continued loan growth and improvements in loan quality in 2015, National Credit Union Administration Chief Economist John Worth said in a video released Tuesday. Part of the NCUA's Economic Update series, the video covers credit union results from the end of 2015 and the outlook for 2015.
Worth cited healthy job gains and falling unemployment as positive signs for the economy.
"Credit unions have generally performed well in this relatively benign macro environment," he said. "Performance indicators for 2014 were good, loan growth was strong, overall loan quality improved and net income was solid. We also saw some reduction in long-term investments as loan growth has picked up."
Worth discusses the effect of low oil prices on different states and regions, including the potential negative employment effects in oil producing regions.
The video also recaps the recent Federal Open Market Committee announcement regarding interest rates. (See related story: Improving economy will boost CU earnings: CUNA forecast.)
Federal Reserve interest rate policies will have important implications for credit union interest rate costs, Worth said, adding that more than half of credit union deposits are currently in accounts paying rates that closely follow short-term money market rates like the federal funds rate or the three-month U.S. Treasury bill.
He advised credit unions concerned about interest rate risk to visit the agency's resource page on that topic.