LEVERAGE is proud to present a new complimentary, educational webinar series in 2023 that will help your credit union get ahead of the most pressing topics trending in today’s financial services operating space. “Learning with LEVERAGE” is a bi-weekly webinar series featuring leaders from many of LEVERAGE’s partners. They will host discussions on issues and present possible solutions within their areas of expertise.
Topics of discussion may include Technology, Operations, Expense Reduction, Risk Management, Employee Management, Member Relations, Marketing, Lending/Payments, Liquidity, and Non-Interest Income.
Join us every 2nd & 4th Tuesday of the month in 2023 and plan on spending 30 - 60 minutes with LEVERAGE beginning at 11:00 a.m. ET.
February’s webinars include:
New Cyber Incident Reporting Rule and Vendor Management Exam Help
ATM Threats and Security Measures
LEVERAGE is excited to announce a new partnership with Dynamic Quest, a managed information technology service provider that works with credit unions to deliver stable, secure, and reliable networking. Dynamic Quest is headquartered in Greensboro, North Carolina, and has offices and employees across the Southeast (including, Alabama, Georgia, and Florida) to make sure clients always have an expert to assist with IT issues.
“In today’s digital age, credit unions are prime targets for hackers,” stated Steve Willis, President of LEVERAGE. “More than ever, credit unions need to focus on maintaining, monitoring, and securing their internal IT networks. Dynamic Quest can help relieve the burden of staying compliant, fending off hacking attempts, and managing increasingly complex digital environments.”
Dynamic Quest offers round-the-clock protection (24 hours a day, 7 days a week, 365 days a year) to prevent technology issues from happening. If a problem does happen, the experts at Dynamic Quest are immediately available to get you up and running. Whether it’s server care, network care, workstation care, or security essentials, you can depend on Dynamic Quest to solve your IT issues.
“With managed IT services, credit unions get a low, fixed cost that fits their budget. No matter your problem, no matter what time, Dynamic Quest and LEVERAGE will be there to provide a stable and reliable IT network,” Willis concluded.
As a preferred technology partner for credit unions, Dynamic Quest understands the unique challenges and opportunities that impact your business.
To learn how LEVERAGE and Dynamic Quest can assist your credit union, visit https://myleverage.com/solutions/dynamic-quest.php or email email@example.com.
By Steve Rick, Chief Economist for CUNA Mutual Group
The latest economic and market data show a road to recovery, with slow growth in Quarter 1 through Quarter 2 of 2023. The U.S. economy is poised for a comeback in 2023, albeit rather slowly.
2023 Inflation and Interest Rate Predictions
Inflation slowed to 7.7% year over year (YoY), a good sign for 2023. Right now, next year’s inflation rate is forecasted at 4%. The supply side of the economy is working out issues in the supply chain, leading to a slowdown in inflation. The inflation rate will likely be high in Q1 and Q2 of 2023 but taper down as demand cools and supply ramps up.
Interest rates rose by 3.75 percentage points in 2022 and are predicted to increase by 0.5 to 0.75 percentage points at the next meeting of the Federal Open Market Committee.
The committee meets again in February 2023, at which time I expect them to raise rates by another 0.5 percentage points. The goal is to get interest rates to 5%.
2023 Consumer Price Index (CPI) and Real Gross Domestic Product (GDP) Predictions
The CPI has been falling after reaching a high of 9% YoY in the Summer of 2022. As of October 2022, the CPI was 7.7%. Now, the biggest concern is heading into a wage-price spiral, where firms give raises between 5% and 7%. They then need to raise prices to cover the raises. This quickly becomes a recurring cycle.
Barring a wage-price feedback loop, I expect the CPI to continue lowering. Key commodity prices for copper, aluminum, steel, and oil have been falling since their peaks last summer.
Current forecasts suggest real GDP growth will be 0% this year. Higher interest rates cool down consumers’ borrowing and spending, pushing down GDP growth. The natural cycle of spending will begin to cool down, as consumers focus on paying down debt.
2023 Mortgage Rate Prediction
U.S. mortgage rates for a 30-year fixed rate sit at 7.6% today, up dramatically from a low of 2.6% in December 2020. Thankfully, with the recent 30-basis point drop in the 10-year treasury interest rate, mortgage rates fell slightly. The expectation is that mortgage rates will hover around 6% in 2023, if not lower.
2023 Recession Prediction
If there is a recession in 2023, it's predicted to hit in Q2 or Q3. There will likely be a bounce back by Q4 of 2023.
Any imbalance right now is in part due to the housing shortage. There’s very little inventory for those looking to buy, so nobody wants to sell. The combination of very few new-home builds and active listings of existing homes is hurting the housing market. I don’t expect a home price crash like in 2008, because the government enacted rules and regulations for mortgage loan originations to scrutinize the borrowers’ ability to repay the loan.
Additionally, the $1 trillion infrastructure bill passed by Congress will offset any private sector recession because the public sector spending will kick in to keep it a mild recession.
Impact on Credit Unions
The biggest concern for credit unions is a liquidity shortage, meaning deposit growth is weaker while loan growth is strong. Credit union loan growth is setting record amounts this year (17-18%).
Credit unions had to lend out more money for each loan but weren’t receiving deposits to balance this out. Credit unions need deposit dollars to make loans, and so far, they’re not seeing any deposit growth.
Supporting Credit Union Members in 2023
Low-income members are under financial stress, so it might be hard for them to afford necessities. Those members are hit hard by overdraft fees. In response, many credit unions are reducing fees or getting rid of fees altogether.
Credit unions can also help members by allowing them to open accounts with no minimum balance. A lot of unbanked individuals just don’t have $500 to meet the minimum required balance. Low fees and no minimum balance will help low-income individuals create accounts, start saving and manage their money.
The U.S. economy is forecasted to make a steady comeback in 2023, with overall positive predictions across all fronts. Expect the Fed to continue raising interest rates in the early half of 2023. Remember, a mild recession is likely to materialize in mid-2023, so keep your balance sheets in check.
The views expressed here are those of the author(s) and do not necessarily represent the views of CUNA Mutual Group.
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