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Economic Update

Discover the latest economic insights impacting Credit Unions, discussing bankruptcy causes, membership growth trends, and challenges faced in comparison to banks. Learn how safety, soundness, and compensation play crucial roles in sustaining Credit Union success.

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Economic Update

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  1. Economic Update Jordan van Rijn Senior Economist, CUNA PhD Candidate, UW-Madison September 17, 2018 CUNA Collections & Bankruptcy School

  2. Overview • Credit Union Impact • Update on the Economy & Forecasts • Credit Union Trends & Forecasts • Safety & Soundness at Credit Unions vs. Banks

  3. Credit Union Impact

  4. $10.9 Billion

  5. Economic Overview

  6. Leading Causes of Bankruptcy • Medical expenses – 42% • Job loss / Unemployment – 22% • Uncontrolled spending – 15% • Divorce – 8% • Unexpected disasters – 7% Source: https://www.clearbankruptcy.com/financial-literacy/10-leading-causes-of-bankruptcy.aspx

  7. What does this mean for credit unions?

  8. 12-Month Growth in CU Memberships (%)Source: NCUA and CUNA

  9. Concerns • Rising interest rates • Trade war • Driverless cars / Ridesharing • Fintech competition • Regulatory changes

  10. Safety and Soundness at Credit Unions vs. Banks

  11. Compensation and Safety and Soundness • Performance-based incentives linked to: • Short-term planning • Excessive risk-taking • Fraud • Earnings manipulations • Shareholder lawsuits • Product safety problems • Sabotage and uncooperative behavior between workers • Financial crisis of 2008-2009

  12. Credit Union vs. Bank Failures

  13. Thank you Jordan van Rijn Senior Economist, CUNA PhD Candidate, UW-Madison jvanrijn@cuna.coop

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