Best Of 2023: Fostering Financially Strong Credit Unions

From liquidity challenges to slowdowns in lending, new regulations and more, credit unions embraced uncertainty this year.

It would be an understatement to say 2023 was a year of challenges for credit unions. There were fears of widespread bank failures and deposit runs as well as slowdowns in lending and a push to boost liquidity. In classic credit union fashion, the industry responded by treating every challenge as an opportunity. This not only helped credit unions differentiate themselves from the competition but also allowed the industry to stretch its creativity in its efforts to tackle some of banking’s toughest problems.

Simply put, the industry embraced uncertainty in 2023 and balanced high levels of member service with sound financial management. You’ll see a focus on that from Callahan in 2024 as we highlight the variety of ways the industry fosters financially strong credit unions.

For now, read on for just a few examples of how cooperatives navigated uncertainty during the past 12 months.

  • Liquidity was perhaps the biggest challenge of 2023 and remains a hurdle heading into 2024. Yet credit unions of all sizes found ways to beat the odds, whether that was GreenState Credit Union’s embrace of non-member deposits, checking and certificate promotions in Texas and Arizona, or Leaders Credit Union’s four-pronged approach to managing liquidity.
  • Rising interest rates, high prices, and diminished housing supply have plagued would-be homebuyers since well before the start of 2023, but Credit Union of Atlanta has embraced the challenge. By partnering with a CUSO and local community organizations, the Georgia-based cooperative launched a downpayment assistance program that gives borrowers a leg up and boosts CUA’s real estate portfolio.
  • The Financial Accounting Standards Board’s current expected credit losses rule — or CECL for short — was phenomenally unpopular, but that didn’t’ stop it from taking effect. Thankfully, with seven years to prepare, Ohio’s Quest Federal Credit Union was ready. The rule put a strain on asset management, but Quest prepared for the shift by running existing ALL calculations alongside the new CECL model. “We didn’t wait until we were sure that they were going to approve the rule,” says CFO Paige Wallace. “Even if we had done it for years and then they abandoned the rule, we preferred to have been prepared versus playing catch up.”
  • They say, “necessity is the mother of invention,” and TAPCO Credit Union needed to boost loan volumes. But instead of any old loan promotion, lending and marketing got creative, crafting a marketing campaign that’s a riff on a not-safe-for-work expression. The result? A massive jump in loan volumes and interest income along with a boost in brand recognition and earnings that doubled the cost of the campaign.
  • During the past 10 years, the average member relationship at credit unions has steadily increased while hiring has fallen behind the pace of member growth. That trend has persisted throughout the past year. Going into 2024, credit unions will need to evaluate whether the current number of employees can accommodate evolving member needs.
December 26, 2023

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