“The problem facing credit unions is that as mortgages and other long-term assets have grown by over 82% since year-end 2017--$703.9 billion vs. $385.8 billion--long-term member shares & deposits have declined by 34%--$28.1 billion vs. $42.5 billion,” CU Capital Market Solutions said in a statement to CUToday.info. “The result is more interest rate risk in the system, which will be captured in the NCUA’s NEV Test and will show up in earnings as interest rates rise. The best option available today for CUs to reduce the IRR in their balance sheet is to increase the amount of non-callable, long-term, fixed-rate deposits.”
According to an analysis by CU Capital Market Solutions, data from NCUA’s year-end Call Reports show:
In April of 2021 the agency issued a legal opinion regarding the application of its share insurance regulations to the proposed structure of the CMCD program. More information can be found at www.ncua.gov/regulation-supervision/legal-opinions