St. Cloud Financial Credit Union ($430.0M, Sartell, MN) has quickly evolved from early adopter to advocate when it comes to digital assts.

The Minnesota-based cooperative has built a core-integrated digital asset vault, connected to multiple blockchain networks, and even launched its own stablecoin. But CEO Jed Meyer is quick to clarify this isn’t about chasing crypto because it’s new and buzzy.

“We never set out to be a trailblazer,” he says. “We always start with our member and work outward.”

This time, it started with a market penetration problem.

In 2019, the credit union had roughly 23,000 members in a market of 200,000 people and nearly 40 competing financial institutions. Through strategic planning sessions, two priorities emerged: to better serve underserved populations through customized products, and to understand where member money might be going next.

That second priority led the credit union to digital assets.

“We were seeing some deposit outflows,” Meyer says. “Not a ton, but enough to ask, ‘what are we going to do?’”

In 2023, approximately $1 million in deposits flowed from St. Cloud Financial to exchanges. In 2024, that number jumped to $15 million.

“That’s a 15x trend of liquidity outflows,” Meyer says.

Across the industry, the CEO estimates roughly 3% of deposits might already be leaving for digital asset platforms with no guarantee of return.

“With every innovation in the past 100 years, we were still needed at some point in the lifecycle of the dollar,” Meyer says. “This is the first time that might not be true. When a dollar leaves me for the DeFi space, there’s never a need for a centralized ledger ever again.”

According to Gallup, one in seven Americans reported owning cryptocurrency in 2025. For St. Cloud Financial specifically, Meyer says 16% to 25% of its members either already have or are showing interest in digital assets.

“Relevancy always equals ROI,” he says. “I’m more interested in plugging the hole in the bottom of the income boat than I am worrying about future dollars.”

Education Before Execution

Before building anything, St. Cloud focused on understanding the space.

The CEO says it’s difficult to find education materials, so the credit union helped foster the Minnesota Crypto Council, a nonprofit focused on education for members, staff, and the broader community. For four years, the organization has hosted quarterly sessions, developed training materials, and brought in subject matter experts.

That education-first approach proved critical not just for adoption but also for addressing skepticism.

“When you launch something like this, you have to speak to the 50% of your membership that doesn’t want it,” Meyer says. “This is optional. We’re not forcing anything.”

Industry peers might be even harder to convince. A fall 2025 report from American Banker found the majority of the banks, credit unions, and payments companies it surveyed remain in the discussions and learning phase. The uncertainty around regulations has slowed adoption, and one of the most common arguments against digital assets is its association with volatility and fraud.

Meyer flips that framing.

“What risk have I actually taken?” he asks. “Other than human capacity and time spent, what risk have I taken?”

In his view, the greater risk lies in waiting.

“I actually think people who say, ‘I’ll get to this in five years,’ are taking the risky position,” he says.

What Came First — The Vault Or The Coin?

Although much of the industry conversation has centered on stablecoins, St. Cloud Financial took a different path with the launch of its CU-Digital Asset Vault in March. Initially envisioned as a digital version of a safe deposit box, it quickly evolved into foundational, core-integrated infrastructure. Rather than building a single product, the cooperative deployed a core-integrated digital asset framework developed by DaLand CUSO – Coin-2-Core – capable of operating across multiple financial rails, from traditional payment networks to blockchain-based systems.

“The vault acts as a vault, but really it’s a switch,” Meyer says. “It turns my core into the wallet. It turns my core into the node. It allows me to plug into any DLT [distributed ledger technology] money network.”

At a structural level, the credit union designed the vault around member ownership, employing a self-custody model where members retain control of their digital assets while the credit union facilitates storage and movement. This is in line with the current regulatory environment, where full custody authority remains an area of ongoing clarification. Rather than push ahead in a gray area, Meyer says St. Cloud Financial has spent years engaging regulators at both the federal and state levels, including ongoing dialogue with the NCUA and the Minnesota Department of Commerce. In the meantime, the vault serves as both a practical member tool and a strategic bridge, connecting digital assets back to the cooperative’s core system without overstepping regulatory boundaries.

With the infrastructure in place, launching a proprietary stablecoin became possible. Although that was not originally a main objective of the strategy, a use case convinced the credit union to proceed. Two national food co-ops approached St. Cloud Financial looking for a settlement solution aligned with cooperative principles.

“We offered them USDC,” Meyer says. “They said, ‘We’re a cooperative, you’re a cooperative. We want a cooperative stablecoin.’”

Thus, St. Cloud Financial introduced the Cloud Dollar ($CLDUSD) in late 2025, making it the nation’s first credit union-issued stablecoin.

Still, Meyer cautions against overemphasizing this aspect of the technology.

“In five years, we’ll look back and say that was a small sliver of what we were actually talking about,” he says.

Don’t Stop Here. Stablecoins and digital assets have moved beyond “wait and see” into active development. For a look at both the risks and the opportunities in this next phase of financial services, read “What Should Credit Unions Know About Stablecoins?” only on CreditUnions.com.

Slow Rollout, Strong Signals

St. Cloud Financial has taken a measured approach to rollout.

Following an NCUA audit in late 2025, the credit union launched a friends-and-family pilot in December and expanded to full membership in March. Today, the credit union holds approximately 15 Bitcoin in its system and between 50 and 75 vaults in progress.

So far the most notable insight isn’t volume, Mayer says, but member behavior, especially among younger demographics.

“When they open a vault, they bring everything with them,” he says, indicating it’s been a way to deepen relationships and increase products per member. “We’ve been told, ‘Finally someone is listening to our generation and what we believe our wealth will be.’”

Consumers are already in the cryptocurrency space, and Meyer urges industry peers not to outsource those members.

“You worked hard for those relationships,” he says. “You cannot continue to give your relationships away to third parties.”

An Uncertain Timeline

Crypto is only the beginning for St. Cloud Financial. The same infrastructure that supports digital assets today could eventually handle tokenized financial instruments, identities, and other forms of value.

“This is going to be bigger than a product,” Meyer says. “It’s going to be bigger than one innovation.”

The CEO expects the traditional finance and digital asset ecosystems will coexist and, ultimately, St. Cloud’s strategy is less about predicting the future and more about preparing for it.

“If this takes another seven to 10 years, I’m okay with that,” Meyer says. “If this happens tomorrow, I’m okay with that.”

For credit unions, the question isn’t whether to launch a stablecoin or offer crypto trading. According to Meyer, it’s whether they will have a role in a financial system where money can move, store, and grow entirely outside of them.

“Our only play is to establish ourselves as the access point, the aggregator point, and the trusted advisor point,” he says.

The post A Credit Union Journey Into Cryptocurrency And Stablecoins appeared first on CreditUnions.com.

Rising interest rates have flipped the traditional credit union investment playbook upside down – transforming the “safe” side of portfolios into a source of embedded losses and constrained flexibility. Fixed-income, which once signaled stability, has become a structural drag on performance.

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A first-of-its-kind collaboration could signal a new avenue for liquidity for mid-sized institutions.

Alloya Corporate Federal Credit Union announced the settlement of its first multi-issuer auto loan asset-backed securitization (ABS) in July, pooling together auto loans originated by three of its member credit unions: Blaze Credit Union, Consumers Credit Union, and Interra Credit Union.

Although selling loans is a well-established financing tool in the credit union industry, packaging loans from separate institutions into a single deal is not. According to Alloya’s chief investment officer, Andy Kohl, it was the bundle’s diversity — three credit unions across three states provided a wide spread — that attracted investors.

“Every tranche was oversubscribed, some seven times over,” he says. “The demand was strong.”

A Hunt For Creative Solutions

The approach required the four institutions — all with their own underwriting, lending, and operational teams — to work closely together for a little more than a year; after which, the corporate credit union sold $150 million in bonds to 16 investors.

Kohl says the idea for a multi-issuer ABS sprang from an effort to identify alternative liquidity solutions post-pandemic.

“During COVID, all that stimulus money flowed in and then out again very rapidly,” he says. “Historically, credit unions needing liquidity could turn to other credit unions that had it, but in that situation, fewer credit unions had liquidity available, and the whole system felt the strain.”

Securitization opens access to investors outside of the credit union ecosystem, such as insurance companies, pension funds, and investment firms. However, it can be expensive and complex, making it unrealistic for smaller financial institutions. Alloya hoped a multi-issuer approach would help circumvent that challenge.

Talks began internally in early 2024. Ryan McCarroll, Alloya’s vice president of Capital Markets, led the charge and formalized the initiative in June.

“None of us knew exactly what this would require,” McCarroll says. “We had to learn a lot on the fly, which meant urgent requests, lots of asks, and figuring things out as we went.”

According to McCarroll, working with the right people was an essential component of success.

“We needed partners willing to ‘build the airplane while flying it,’ and this group stepped up,” he says.

Kohl echoes that sentiment.

“The three credit unions we partnered with couldn’t have been better,” the CIO says. “They were motivated by service to the system, not immediate need. That was key.”

Cooperation Over Competition

You wouldn’t see something like this in the banking world. For us, it was about supporting the broader system.

Blaze Credit Union ($4.4B, Falcon Heights, MN saw the opportunity as a way to give something back to the industry.

“Ten or 15 years ago, we needed our leagues and corporate credit unions to step up for us, and they did,” says Justin Burlseon, the credit union’s senior vice president and chief operating and financial officer. “Now that we’re larger, we see it as our duty to do the same for others. You wouldn’t see something like this in the banking world. For us, it was about supporting the broader system.”

Similarly, Jim Henning, chief financial officer at Interra Credit Union ($1.9B, Goshen, IN), says the collaboration was a way to access capital markets that had historically been closed to the Indiana cooperative.

“Being part of building that pathway was important, regardless of immediate need,” he says.

Regardless of individual reasons, all three credit unions — Blaze, Interra, and Consumers — say buy-in was unanimous.

“Our CEO [Amy Sink] had been behind a strategy like this for years,” Henning says. “So internally and with the board, it was an easy sell.”

At Consumers Credit Union ($4.2B, Lake Forest, IL), chief financial officer Sean Bowers says prior experience selling loans individually put his institution’s board at ease with the strategy. Plus, it required no extra hurdles when it came to staffing.

“We actually budgeted for this in 2025 and brought it to the finance committee,” Bowers says.

The collaboration served as a valuable learning experience for all parties involved. According to Bowers, it challenged his team to learn more about the credit union’s own data and loan portfolio.

“We had to dig into disclosures and requirements and really analyze things differently,” he says. “Being part of this deal gave us new insights into how our portfolio is structured and how to think about future pricing strategies.”

Consumers broke down its pricing by credit grade and shared those results internally to see how it could better align pricing with member value while staying relevant to the market. Over at Blaze, Burleson says the deal motivated his staff members to realize they can do more than previously thought.

“Without being pushed, we might not have taken on a deal like this,” he says. “But the team rose to the challenge.”

At Interra, Henning says joining forces with two other credit unions was motivating.

“It wasn’t just about us at Interra succeeding or failing,” he says. “If we didn’t deliver, the others would feel it too. That accountability pushed us forward.”

Blazing The Trail For Future Deals

Greg Hill is a strategic initiatives consultant at Alloya. Looking back at the effort from start to finish, he says what stood out to him most was how open everyone’s teams were.

“Every part of the process was a lesson learned,” he says. “None of us had done this before, so everything from legal to ratings agencies to structuring was new. No one was rigid about how things had to be done. That openness let us build a template that not only worked for this deal but also will help future ones.”

Burleson called the process an example of the industry’s cooperative principles in action.

“Philosophically, this is proof of the credit union difference. We sometimes get flack for our tax status, but this is why we’re structured differently,” he says.

“I’ll second that word for word. Underline it, bold it, italicize it,” Henning says.

According to Hill, now that Alloya has a playbook, the goal is to bring in more credit unions and complete more deals.

“The $150 million was a proof of concept,” he explains. “We wanted to test the structure, the ongoing management, and the investor appetite. This opens the door for somewhat smaller organizations to participate by partnering together.”

Henning calls the strategy a huge increase in access.

“Before this, maybe 100 credit unions could realistically access the secondary markets through this type of model,” he says. “With what Alloya built, that number could expand to 1,000.”

Consumers’ CFO encourages other credit unions to get involved.

“This isn’t a one-and-done,” Bowers says. “There will be future deals, and the more participants, the stronger the program becomes. Even if you don’t need liquidity today, it’s another tool in the toolbox.”

The post Midwestern Credit Unions Break New Ground With Auto Loans appeared first on CreditUnions.com.

For U.S. credit unions, year-over-year loan growth in the third quarter was 2.5% and share growth was 3.2%. Meanwhile, TruStage calls for 6% growth in 2025 in both those crucial categories.

Of course, those results depend on interest rate movement and the economy. The Fed continued lowering its benchmark rate in December but signaled a slowdown in rate decreases in the year to come, barring unforeseen changes. With all of that in mind, five credit union decision-makers offer their thoughts on 2025.

No Feeding Frenzy

Tom Gryp has been president and CEO of Notre Dame FCU ($1.2B, Notre Dame, IN) since September 2010.

What is your outlook for deposits in 2025? What factors are you watching that might change your forecast?
Tom Gryp: Barring another liquidity crisis like the Silicon Valley Bank collapse, I see access to deposits remaining strong in 2025. That said, deposits are no longer “lazy,” meaning depositors will move to seek better rates if the incumbent credit union is not competitive. I expect cost of funds to increase even in a falling interest rate environment, as traditionally low-paying share accounts migrate to money markets, certificates, or other instruments that pay more.

Top of mind are macro events like another liquidity crisis that will drive depositors to where they deem their deposits above $250,000 to be safer, which has traditionally been money center banks considered to be too big to fail.

Second would be the Federal Reserve’s balance sheet. If the Fed accelerates the speed at which it extracts reserves from the system, it could trigger liquidity concerns.

Is your shop doing anything new on the deposits front or focusing on a specific area or product?
TG: We made the decision a while ago to avoid the feeding frenzy caused by hot money certificates. To us, such a strategy is a fool’s errand that creates no member stickiness and only solves liquidity challenges for a few months. Instead, we focus on making our share draft accounts more attractive.

We’ve seen a great deal of success with individuals, businesses, and non-profits moving their major operating accounts our way. How do we make them more attractive? We pay high rates on share draft balances plus we do not charge fees. That strategy might or might not be as expensive as hot money certificates, but we establish long-term relationships that nearly always blossom into new opportunities.

Shoreline Credit Union is responding to falling deposit rates while girding its balance sheet for loan growth. Read more in “Shoreline Lands On Its 2025 Deposit Strategy.”

A Focus On Direct Members

Michael Cruz joined Seattle Credit Union ($1.1B, Seattle, WA) as its chief financial officer in July 2024.

What is your outlook for deposits in 2025? What factors are you watching that might change your forecast?
Michael Cruz: Deposit growth will remain a challenge in 2025, though we expect some improvement over 2024. A key factor in deposit growth lies in growing direct members, who represent the greatest opportunity for us to deliver value and capture deposits.

While total member growth can benefit from indirect channels, converting indirect members into deeper relationships — like deposits — remains very difficult.

Direct members are the engine of our credit union. By focusing on attracting and engaging direct members, we will drive meaningful deposit growth despite significant competition. Upward direct membership growth is a good indicator of future deposit inflows.

Is your shop doing anything new on the deposits front or focusing on a specific area or product?
MC: In 2025, we’re committed to rewarding our loyal members with meaningful incentives that match the depth of the relationship. Whether through discounted loan rates, higher deposit yields, or other financial solutions, we’re bolstering our member-first strategy to stand out in a fiercely competitive deposit market. The more direct members we attract and engage, the more deposits will follow.

Deposits And Payments Working In Tandem

Shelia Kime has been with Texas Trust Credit Union ($2.0B, Arlington, TX) for 25 years and its senior vice president of operations since February 2020.

What is your outlook for deposits in 2025? What factors are you watching that might change your forecast?
Shelia Kime: Based on current economic and industry trends, Texas Trust is optimistic about deposit growth in 2025. Both credit unions and banks will face growing competition from fintechs and non-traditional institutions.

We’re prioritizing member-focused innovations to strategically position ourselves to achieve deposit growth while enhancing service to our members. We’re closely monitoring the impact of technological advancements as well as potential regulatory changes that might influence deposits and payments, potentially shaping our future outlook.

Is your shop doing anything new on the deposits front or focusing on a specific area or product?
SK: We’re focused on developing products and services based on what’s important to our members. This currently includes high-yield accounts, certificates of deposit, investment options, omnichannel account opening solutions, digital innovations, financial wellness, and community impact.

Our deposit growth is aligned with our payment strategy, as the two work in tandem to grow assets by attracting funds, increasing account activity, and driving loan opportunities. Innovative payment solutions bring in new members, increase account usage, and boost deposit balances. In turn, deposits provide funding for lending and other asset-generating activities, which will help drive our growth. By enhancing both we can achieve long term sustainable asset growth. Of course, we constantly monitor trends and market conditions and adapt our strategies accordingly.

Short-Term Changes, Long-Term Results

Tim Alther joined UVA Community Credit Union ($1.5B, Charlottesville, VA) as the cooperative’s senior vice president of retail and deposits in November 2023.

What is your outlook for deposits in 2025? What factors are you watching that might change your forecast?
Tim Alther: I think it will be a more difficult year for deposits overall. In terms of large-scale macroeconomic forecasting, I see a declining rate environment. The speed or magnitude of that rate environment could be a discussion point. Anything could change the trajectory of rates, particularly if there’s something large-scale happening in the economy. That’s the only factor that would likely shift our current forecast. A lot of what I focus on is rate movement.

Is your shop doing anything new on the deposits front or focusing on a specific area or product?
TA: We have several initiatives, including a new program specifically for members younger than 18. We’re also working on initiatives such as higher-rate and more inclusive savings products that cater to a variety of needs — whether someone is starting their first retirement account or looking to consolidate accounts across different financial institutions.

We’ve also adjusted some policies. For example, we now allow account opening via video for individuals who might not have a driver’s license or access to a branch. We’ve introduced an in-depth educational series for every new account. This includes showing members a group of videos with tips on how to use an ATM, balance a checkbook, and manage an account responsibly.

Although these initiatives might not result in material changes to our balance sheet immediately, we believe they will have a positive impact on our members for years to come.

Stay The Course, Reprice As Needed

Tom Griffiths has been with Atomic Credit Union ($730.4M, Piketon, OH) for 31 years, the past 22 as its CEO.

What is your outlook for deposits in 2025? What factors are you watching that might change your forecast?
Tom Griffiths: Our outlook remains positive. We’ve experienced 19.94% deposit growth during the past 12 months compared to roughly 3% for our peers. We needed that to maintain 22% loan growth over the same period. With a 90% loan-to-share ratio, a solid net worth ratio, and delinquency at only 19 basis points, we’re firing on all cylinders.

We’ve experienced these growth metrics for numerous consecutive years, all organically. We envision deposit rates to continually decline throughout 2025 as it is well known that [President-elect] Trump is adamant that interest rates be as low as possible, specifically to jump-start the housing market. Ultimately, we believe we are in a long-term declining rate environment that will most likely mean more deposits into money market accounts than we’ve had in the past several years.

Is your shop doing anything new on the deposits front or focusing on a specific area or product?
TG: Atomic will be staying the course on the deposit front, tweaking the deposit faucet as needed to meet loan demand. We’ll also be enjoying the benefits of repricing our deposits in this much-anticipated declining rate environment.
Unlock Smarter Deposit Strategies With Peer Suite. Compare your credit union’s deposits and savings performance against industry peers to uncover trends, identify opportunities, and elevate your strategy. Peer Suite gives you the data-driven insights you need to stay ahead. Request a performance analysis session today.

The post How 5 Credit Unions Are Approaching Deposits In 2025 appeared first on CreditUnions.com.

Indeed, members who paid little attention a few years ago are now looking to lock in rates and secure their financial future.

“We’re seeing members lock in longer-term certificates more than ever,” says Nathan Grossenbach, who has served as president and CEO of the cooperative since 2017. “This reflects growing confidence that rates will decline. Members don’t want to miss out on what they see as favorable terms.”

This shift coincides with broader economic trends. The Federal Reserve began cutting rates in 2024, including a 25-basis-point cut on Dec. 18. Forecasts indicate a drop of another percentage point or so to 3.3% by late 2025. Meanwhile, TruStage forecasts 6% growth in credit union deposits and loans in that period.

A Delicate Balance

Grossenbach emphasizes the delicate balance required to manage growth in such a dynamic environment. He says his team is focusing on the stability of the rate market, where loan rates have fallen faster than deposit rates.

“Auto loan rates have dropped 200 basis points in the past six weeks in our market compared to a 50 to 100 basis-point decrease in certificate specials,” Grossenbach says. “We expect this to stabilize to a spread of somewhere between 100 and 150 basis points, excluding any promotional rates.

In Shoreline’s market, some small credit unions  are challenging the yield curve. According to Grossenbach, one local credit union recently ran a 3.99% special on auto loans and a 4.99%, nine-month certificate special.

Grossenbach says more sophisticated credit unions can manage such spreads, but there is concern about larger institutions leveraging loss leaders to gain market share. That’s not the approach at his shop.

“We’ve typically stayed pretty true to analyzing cost of funds from an alternative pricing strategy,” Grossenbach says. “We want to remain competitive but also are open to leveraging debt if it makes more fiscal sense.”

That includes pricing in roughly 25 basis points of premium over the cost of comparable debt to raise interest in and for certificates. Grossenbach says the credit union views non-member deposits as emergency cash due to the premium required to issue them. But significant swings in the yield curve might impact that deposit strategy as well, prompting changes in the funding mix.

Ultimately, though, Grossenbach says the challenge is in maintaining a competitive edge without compromising financial sustainability.

Member-first strategies come to the forefront in a changing rate environment. Learn more in “How 5 Credit Unions Are Approaching Deposits In 2025.”

Better Deposit Strategies

Shoreline is taking other steps to align deposit strategies with evolving member needs. Although money markets were the go-to option earlier in 2024, its focus has shifted to term deposits as members look to hedge against future rate decreases.

“We’re not yet pushing four- or five-year certificates,” Grossenbach says. “We’re actively promoting those one- to three-year options that match our members’ expectations and needs.”

Those certificates accounted for 22% of new issuances at the credit union at the end of 2024, he notes, a sharp rise from just 3% earlier in the year.

Grossenbach adds that he and Shoreline’s management team expect rates to fall by 50 to 100 basis points during the next few years, giving them ample time to wait before promoting longer-term certificates.

As for the other side of the balance sheet, Shoreline plans a sale-leaseback in January that will infuse 33% growth of capital.

“From that, we’ll be able to originate an extra $24 million of real estate loans, which is approximately 20% of our total assets,” Grossenbach says. “We intend to grow substantially in 2025-2026 through real estate originations and will do so on the back of debt and aggressive deposit growth. Underpinning that strategy is the need to manage the growth to a 1.50% spread to hit our targets, so that is highly influencing our deposit/funding strategy.”

Unlock Smarter Deposit Strategies With Peer Suite. Compare your credit union’s deposits and savings performance against industry peers to uncover trends, identify opportunities, and elevate your strategy. Peer Suite gives you the data-driven insights you need to stay ahead. Request a performance analysis session today.

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Platinum Federal Credit Union ($320.1M, Duluth, GA) introduced business checking services in 2004. Today, the product comprises 44% of the credit union’s portfolio.

According to CEO Kabir Laiwalla, the credit union wanted to offer its local businesses simpler, more cost-effective solutions.

“That’s what attracted small to mid-sized businesses to bank with us,” he says. “That’s how we now have 2,500 business accounts.”

At Platinum, business members enjoy a flat monthly fee of $60 per month, up to $100,000 in cash deposit withdrawals, and unlimited transactions for everything else. This is a stark contrast from the strict limits on transaction and withdrawal amounts that are common in business checking.

In the Northwest, Pacific Crest Federal Credit Union ($346.3M, Klamath Falls, OR) has experienced similar success with its business services, with business checking accounting for 17% of its portfolio.

“We were in the bottom third in the nation eight years ago,” says CEO Chad Olney. “We’re in the top quartile now.”

YEAR-OVER-YEAR DEPOSIT GROWTH
FOR U.S. CREDIT UNIONS
© Callahan & Associates | CreditUnions.com

Like Platinum, Pacific Crest’s business accounts offer lower fees on average or no fee at all for some options. However, Olney says the real differentiator is the credit union’s quality of service, especially its responsiveness.

“They know they can call or come in and actually talk to somebody who can help them and is responsive to their individual needs,” he says.

Olney does warn, however, that businesses often have higher standards than the average retail member because businesses have more to lose.

“If there’s an issue with a regular member’s debit card, it might stop them from making a purchase,” he  says. “But if on the business side you do something that decreases the revenue coming in, it’s significantly more impactful and remembered for a much longer time. So, you have got to dial in your processes.”

Relationships And Reputation

In the business banking world, the power of word-of-mouth is too big to ignore.

“Business owners tend to talk to other business owners,” Olney says. “They run in the same circles. They share similar struggles. Business members talk about their relationship with their banks to other business representatives.”

Laiwalla recalls the lasting impact a single wholesaler had on Platinum after opening an account in 2005. He used his Platinum business account to pay vendors and conduct business, which amplified the credit union’s presence in the community.

“A lot of community members were buying supplies from him for their gas stations or convenience stores,” Laiwalla says. “They said, huh, he’s banking at Platinum, maybe we should move our account to Platinum.”

To increase the chances of this ripple effect occurring, many credit unions find it useful to build relationships with trade associations or their local chamber of commerce.

Platinum benefitted early on from its involvement with the Atlanta Retailers Association, which had provided a large donation toward the founding of the credit union. This relationship combined with regular appearances at trade shows and community events made business services soar at the credit union.

“Our membership sees the value that banking with a community-focused financial institution brings,” Laiwalla says.

According to the CEO, businesses know they can turn to Platinum in times of crisis because it’s a trusted name within the community. Ergo, why not regularly bank with the credit union?

Pandemic And PPP

Similarly, Olney says the secret sauce behind Pacific Crest’s business checking growth is its positive reputation among CPAs and accounting firms.

“That came about purely by accident and had a lot to do with PPP,” he says. “During the pandemic, we became a sort of community expert on it.”

This was unexpected because the credit union originally had no intention of participating in the paycheck protection program at all.

“We didn’t have an established relationship with the Small Business Association,” Olney says. “We were telling our businesses to go anywhere else that had their credentials and relationships and do it faster. They did, and banks literally wouldn’t accept their applications.”

During the pandemic, banks were accused of prioritizing larger businesses over smaller ones. It didn’t take long for Pacific Crest to identify a need among its membership.

“We had a member come to our drive-thru, put his application in the tube, and say, ‘I know you guys aren’t planning to do this, but you’re my only hope because nobody else will take it,’” Olney says.

Determined to help as many small businesses as possible, the credit union contacted local accountants to spread the word that it was taking PPP applications.

“That really kicked things off,” Olney says. “We were just trying to help our businesses stay in business.”

Meanwhile, Platinum became a licensed SBA lender in 2019 but intentionally chose to not promote its new certification until staff could become more familiar with it. That all changed less than a year later.

“We grew a lot of business accounts during COVID,” Laiwalla says. “Not all of them stayed with us, but a lot of them did. That’s how we had a big boom in 2020 to 2021.”

By the end of the pandemic, Platinum serviced $25 million in PPP loans.

Both CEOs say their organization’s dedication to saying yes when other financial institutions were saying no left a lasting impression on their markets.

Looking Ahead To 2025

The economic landscape presents a mixed but cautiously optimistic picture. This is good news for many business owners and, by extension, the financial institutions serving them. After all, prosperous businesses present cross-selling opportunities.

“Most of the time it’s loans first, checking second,” Olney says.

Businesses also tend to maintain higher account balances than retail members, giving credit unions a boost to their liquidity and lending capacity.

“On the deposit side, because many industries are seasonal, we know when to expect to see a decline or uptick in deposits,” Olney says. “On the lending side, because of the repricing nature of commercial loans, it’s helped with our portfolio management.”

Laiwalla says he often consults other credit union leaders about the impact business checking has had on his organization.

“With businesses, that cash flow keeps churning,” he says. “We are working with new businesses pretty much every week, and that is bringing in more and more cash flow. So, we have not had any issues with liquidity.”

Unlock Smarter Deposit Strategies With Peer Suite. Compare your credit union’s deposits and savings performance against industry peers to uncover trends, identify opportunities, and elevate your strategy. Peer Suite gives you the data-driven insights you need to stay ahead. Request a performance analysis session today.

The post Is Business Checking Underrated? appeared first on CreditUnions.com.

Of course, “financial wellbeing” can include loan or deposit products, financial education, or something else entirely depending on the life status and financial position of any individual member. Despite that challenge, success stories abound of credit unions serving members where they are and how they need.

• The economy is improving! At least, that’s what the data says. Unfortunately, many consumers — and Gen Z in particular — simply aren’t feeling it. To combat the “vibecession” funk credit unions are turning to social media and superior experiences.
• Saving money is important, but stashing away even a modest amount can be an insurmountable feat with standard products and rates. But a new high-yield savings account at Langley FCU is improving nest eggs and financial acumen while boosting liquidity at the cooperative.
• Junk fees? Not at Community Financial, where a fee-free checking product helps members budget their money and spend within their means.
• Is retirement a pipe dream? Data from YouGov offers a rude awakening about financial security in the twilight years; it also sheds light on how credit unions can help members better plan for life after a paycheck.
• Members’ mortgage needs are as varied as the homes they hope to purchase. So why do most programs treat all borrowers the same? In the name of equity and accessibility, Honor Credit Union in Michigan segments its mortgage products by demographic, profession, and more.

How about your credit union? How do you support member financial wellbeing? What successes have you notched? What lessons have you learned? Let us know, and we might feature your story on CreditUnions.com.

Looking for more of the best of 2024? Click the links below to revisit some of the year’s best content from Callahan’s award-winning editorial team.
Best Of 2024: Driving Employee Engagement
Best Of 2024: Building Vibrant Communities
Best Of 2024: Fostering Financially Strong Credit Unions

The post Best Of 2024: Supporting Member Financial Wellbeing appeared first on CreditUnions.com.

Credit unions could benefit from reduced funding costs and new repricing opportunities. Those will most likely impact borrowings, loans, and investments, and many institutions will be looking to regain balance sheet flexibility as these shifts continue.

The New Normal — Now What?

Liquidity needs drove many balance sheet decisions in recent years, including lending and deposit strategies, investment portfolio management, and capital generation.

After rapid rate increases in 2022 and 2023, credit unions have adjusted to the new normal just in time for a rate cut cycle. Many shops are preparing for this shift by maximizing balance sheet flexibility.

• Borrowings now fund 5.2% of industry assets, down from a peak of 6.0% at the start of 2024, as managers started to pay down these costly funding sources. Loan and share growth continue to move at the same slow pace, lessening the need to lean on borrowings to meet loan demand.
• During the past 12 months, credit unions attracted $61 billion in shares — primarily through certificate promotions — while loan balances increased just $42 billion. This is a stark contrast from 2022 and much of 2023, when loans on the balance sheet often outpaced incoming shares by more than $100 billion over any given 12-month

After a dramatic two-year increase, the loan-to-share ratio has flattened, hitting 84.2% at the end of the third quarter. Even with the worst of the liquidity crunch behind them, many credit unions are sitting on the sidelines, reducing certificate promotions, paying down borrowings, and slowing their lending. The goal is to wait for rate cuts, which should bring cheaper funding opportunities.

Your Performance Packet Is Ready. It’s Time To Take Your Credit Union To The Next Level. Sit down with a Callahan advisor to review your tailored performance packet, and we’ll show you how your credit union measures up against peers in cost of funds, investment and loan yields, loans to shares, and more. Armed with this knowledge, your leadership team can make better plans and set stronger goals. What are you waiting for? Request your session today.

LOAN-TO-SHARE RATIO
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Rates And Repricing Opportunities

With inflation seemingly under control, the Fed has shifted its goals toward economic stimulation. Core inflation hit 3.2% in August, a number the Fed seems to be more comfortable with. Along with that, the Fed has cut its benchmark rate by 75 basis points since September.

However, economic data released after the Fed’s November meeting generated mixed reactions. Stronger-than-expected retail sales in October led some Fed officials to suggest the economy still has some cooling off to do and advised that the Fed should pause further rate cuts until inflation nears the traditional 2% target.

Once more rate cuts come, credit unions will have an opportunity to reprice some deposits and borrowings at lower rates.

• More than 80% of current share certificate balances are set to mature by the end of September 2025. That represents 23.4% of total shares. Credit unions will likely wish to keep these funds around after the certificates mature, ideally at a lower cost. Members could reinvest in another certificate, move the funds into another account, or into a brokerage account to invest in the stock market.
• Keeping funds in-house could provide some relief. Credit unions’ cost of funds increased 67 bps year-over-year to 2.13% in the third quarter of 2024.

YIELD ANALYSIS (ANNUALIZED)
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Borrowings represent a less-prominent repricing opportunity.

• 3% of current borrowings are set to mature by September 2025.
• The average cost of borrowings settled at 5.17% in the third quarter. That gives the 1,064 U.S. credit unions that borrow real opportunity to reduce costs if interest rates fall.

More Borrowing Ahead?

Borrowing can be a cost-effective option should members move their funds elsewhere as certificates mature. Although the prevailing rate environment does impact deposit prices, cash availability and competition play a significant role. Borrowings, on the other hand, should be available at cheaper costs following rate cuts and can be used if member shares remain hard to come by. Borrowed money only comprises 5.2% of industry assets today but could grow as rates decline.

Lower benchmark rates won’t only be felt in funding costs, but in loans and investments too.

• 8% of real estate loan dollars outstanding are set to contractually reprice, mature, or refinance in the next five years — up from 26.4% one year ago. However, some of these maturing and repricing loans are pandemic-era loans originated at even lower interest rates than today’s environment, so even with rate cuts coming, we could see some repricing to the upside.
• 7% of the industry’s investment securities will mature in the next 12 months, offering little time to reinvest these funds into higher investment yields before rates move lower.
• Similar to loans, many of these maturing investments were purchased when yields were ultra-low during 2020 and 2021, so most credit unions hope to move these assets off the books as soon as possible. For credit unions with spare liquidity to invest today, locking in termed securities pre-rate cuts could provide an added boost to the earnings in the years to come, and could even generate some portfolio gains — a welcome concept after the past few years of handcuffing unrealized losses.

Recent rate cuts reduced the industry’s total unrealized loss on available-for-sale securities by $8.4 billion in the third quarter. That boosted capital and provided some relief for portfolio managers locked into these losing securities for the past few years. These securities haven’t yet reached their break-even price, but the smaller the unrealized loss, the easier it is to sell the security. That will free up liquidity to lend to members or reinvest at today’s higher rates.

ACCUMULATED UNREALIZED GAIN (LOSS) ON AVAILABLE-FOR-SALE SECURITIES
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Ultimately, rate cuts should give credit unions something they haven’t had for the past couple years — flexibility. Just over 25% of combined termed shares and borrowings will mature in the next year, and credit unions will look to reduce the interest rates paid on existing deposits should rate cuts materialize. This will lower the cost of funds, which has more than quadrupled during the past two years. Funds from maturing investments will either be reinvested at lower yields or loaned to the community should demand rebound. Credit unions have learned from the past and  are positioned to adapt their balance sheets to whatever comes in 2025.

Higher interest rates have forced members to pick and choose which debts to repay and which to postpone, which doesn’t are well for revolving products. Read more in “Asset Quality Is Worsening. Is There Light On The Horizon?”

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Your Midyear Board Packet Is Ready. Sit down with a Callahan advisor to review your tailored performance packet, and we’ll show you how your credit union measures up against others. Armed with this knowledge, your leadership team can make better plans and set stronger goals for 2025 and beyond. What are you waiting for? Request Your Packet Today.

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• Credit unions’ shares per branch have risen by 50% in the last five years despite minimal change (a 0.8% increase) in branch numbers. The industry has become more efficient at absorbing deposits in that time, thanks to increased usage of self-service channels and the boost in deposits from economic stimulus payments consumers received early in the pandemic.
• This shift has allowed credit unions to reorient their staff from traditional branch services toward more holistic endeavors. The number of credit unions offering members financial literacy workshops has steadily risen over the years, helping members as well as the credit union bottom line.
• The timing for all this couldn’t be better, as more and more customers expect their financial institutions to not just offer loans and savings, but also advice. A 2022 retail banking survey from J.D. Power revealed declining satisfaction with the quality of financial advice consumers receive from financial firms. Credit unions that position themselves correctly could capitalize on this vacuum.

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