The Federal Credit Union March-April 2014 - (Page 6)
Nimble Credit Unions Adjust
Quickly to Industry Changes
any enterprises succeed and
fail based on their ability to
manage changing dynamics,
both within their own walls
and from outside forces. Sometimes the
external factors that impact business are
beyond the control of the business owner,
and one must forge ahead with the circumstances that have been handed down.
In the "Special Topic" survey in the January
issue of the NAFCU Economic & CU
Monitor, the news was both positive and
challenging, and respondents demonstrated
that they are focused on the changes in the
financial services industry and how those
influence their day-to-day business.
"Credit unions continue to adjust to economic factors and technological changes
in the financial industry," said Doug
Christman, research assistant at NAFCU.
"They also are making changes due to
the regulatory burdens that have been
popping up, and credit unions look like
they're moving pretty quickly to comply."
One positive sign from the survey is that
11.4 percent of respondents plan to increase
member business lending programs.
Christman said this is a continuation of a
scenario created by the poor economy over
the past five years. While banks tightened
the credit strings, credit unions were more
willing to lend to small businesses and
continue to expect gains in that area.
Another plus is that slightly more
than one-fifth of respondents anticipate
increasing their credit union service
organization (CUSO) investments
this year, and more than 15 percent
are considering additional sharedbranching opportunities.
Because of many of the regulations
brought about by the Dodd-Frank Act
in 2010, 20.6 percent of respondents
are considering searching for a partner
with whom they can merge. "Part of the
regulatory burden is the cost of complying with those regulations," Christman
explained. "For smaller credit unions,
this burden drives a higher proportion of
costs, so if you merge with a larger credit
union, your costs are spread out."
Another 38.2 percent of respondents are
looking to add a select employee group
to their field of membership. Membership growth can help fend off some of
the added regulatory costs. According
to Christman, however, some credit
unions are limited in how they can
increase their membership.
The third significant item in the survey, Christman says, is that more than
one-third (36.7 percent) of respondents would offer Interest on Lawyers
Trust Accounts (IOLTA) if they were
Some other points highlighted in the
71 percent of respondents confirmed
that their vendor costs have increased
because of Dodd-Frank.
■■ 43.8 percent have contracted with new
vendors because of increasing regulations.
■■ 6.7 percent have concerns that their
vendors will not meet compliance
deadlines in 2014.
■■ 3.1 percent are looking to outsource
their mortgage programs.
■■ 6.3 percent are considering outsourcing
other loan or credit card operations.
Combining this report with positive
news out of the December Monitor that
signaled continued membership growth
as well as growth in new-vehicle sales,
it appears the credit union industry is
adapting to the changing environment
and succeeding in identifying areas to
continue to grow.
THE FEDERAL CREDIT UNION MARCH-APRIL 2014
Table of Contents for the Digital Edition of The Federal Credit Union March-April 2014
Voices & Opinions
From the Chair
100 Ways to Grow
Getting to Know...
Inside NAFCU Services
From the President's Desk
The Federal Credit Union March-April 2014