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.