Credit Unions' Cost of Funds Declines in the Third Quarter, but at a Slower Pace

Amid a declining interest rate environment, the 938 credit unions participating in Callahan & Associates' First Look program have had their cost of funds ratio fall 78 basis points between June 30,2002 and September 30, 2003. Over the past three months, however, the rate of decrease among these credit unions has tapered off, and since June 30 of this year, has fallen only 8 basis points.

 
 

Amid a declining interest rate environment, the 938 credit unions participating in Callahan & Associates' First Look program have had their cost of funds ratio has 78 basis points between June 30, 2002 and September 30, 2003. Over the past three months, however, the rate of decrease among these credit unions has tapered off, and since June 30 of this year, has fallen only 8 basis points.

The cost of funds indicates how much credit unions pay for their money, whether it is in the form of dividends to shareholders or as interest to creditors. Low cost of funds indicates that credit unions are paying lower interest on deposits and fewer dividends on shares to their members.

 

 

 

Nov. 24, 2003


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