LEVERAGE Monthly Newsletter

In the ever-evolving financial services industry, staying informed and proactive is paramount for credit unions.

Join LEVERAGE every second and fourth Tuesday of the month in 2024, starting at 11:00 a.m. ET, for engaging discussions that promise to equip you with the knowledge and tools necessary to navigate the challenges and opportunities ahead.

🔍 Key Findings in Compliance Audit
Date: February 27, 2024
Time: 11:00 a.m. EST
Speaker: Marcus King, Vice President, CUACG

Discover key insights and strategies to enhance your credit union's compliance efforts and ensure regulatory adherence.

Click here to learn more and register: REGISTER TODAY!

For additional information or inquiries, please get in touch with us at consult@myleverage.com.

Did you miss our previous webinars? Catch up on valuable insights and discussions by accessing our archive here.

Take advantage of this opportunity to stay ahead in the industry. Register now and mark your calendars for an insightful journey with LEVERAGE's webinar series!

CU Solutions Group (CUSG) is dedicated to providing credit unions with the tools and resources they need to thrive in today's competitive landscape. From strategic planning to employee development, our solutions elevate your credit union's performance and enhance member experiences.

CEO Review
Strategically connect and evaluate your CEO’s performance through a dedicated CEO review consultant, customized CEO performance and compensation plans and reviews, and CEO compensation benchmarking.

Compease: Salary Tools
Salary tools to attract and employ the best talent include a job evaluation system, salary grades and ranges, merit increase planning, compensation management, salary updates, job descriptions, compensation consulting expertise, onsite system implementation, and user training.

Love My Credit Union Rewards: Spectrum
Mobile and Internet Services Partnering with Spectrum, we bring members the best of both worlds with internet and mobile services. Members save and earn cash rewards for activating new mobile lines, all while enjoying reliable 5G networks and nationwide Wi-Fi hotspots.

Love My Credit Union Rewards: T-Mobile
With T-Mobile, members enjoy America's largest and fastest 5G network, unlimited premium data, streaming entertainment, travel perks, and more. Switch to T-Mobile, save up to 50% on service, and earn $50 for each newly activated line.

Performance Pro
With Performance Pro, you can bring a plan to your credit union that lays out expectations and helps employees meet those goals. An automated employee performance evaluation process is a crucial feature among many others.

Planning Pro
Imagine. Plan. Execute. Planning Pro allows you to create your strategic plan as a living document, where you can create and automatically update presentations, use call report data to bring the right questions to the table, compare data with peer credit union groups, survey your employees, and more – all while enjoying a simple, intuitive user experience.

The Learning Center
Invest in your employees' growth with The Learning Center (TLC). From regulatory compliance training to skill development, TLC offers an integrated learning management system and a vast library of courses to maximize your training investment.

At CUSG, we're committed to helping credit unions succeed.

To learn more about LEVERAGE and CUSG, visit https://myleverage.com/solutions/cusg.php or contact a LEVERAGE Business Development Consultant at consult@myleverage.com.

Home Improvement Loan
Looking to expand your credit union's lending portfolio and drive growth? Look no further than LendKey's home improvement loan solution! This innovative program provides credit unions with a supplemental channel to deploy capital, grow loans, and achieve an attractive net return on assets (ROA).

Student Loan Refinancing and Consolidation
In today's competitive market, credit unions must offer relevant products to attract and retain members. That's where LendKey's student loan refinancing and consolidation solution comes into play. By partnering with LendKey, credit unions can provide graduate students and professionals with a gateway product that meets their needs and opens the door to other credit union offerings.

Private Student Loans
As members embark on their financial journey, their first interaction with a credit union can set the stage for a lifetime of lending. LendKey's private student loan solution enables credit unions to attract and retain younger members while diversifying their asset base.

Credit unions can be trusted financial partners by providing private student loans.

Partner with LEVERAGE and LendKey to unlock new lending opportunities and build lasting relationships with your members. Visit https://myleverage.com/solutions/lendkey.php or contact a LEVERAGE Business Development Consultant at consult@myleverage.com.

By Steve Rick, Chief Economist for TruStage

Recent economic and market data tells us 2024 will bring slow, but steady economic growth and possible interest rate reductions. The Fed will continue to battle inflation with a balanced approach to interest rates in hopes of staving off a recession and bringing inflation rates to an acceptable standard.

2024 inflation and interest rate predictions
Presently, the effective federal funds rate stands at 5.35%, with projections suggesting a marginal drop in the summer of 2024. Despite this modest decrease, caution is advised regarding the Federal Reserve's approach to lowering the inflation rate, given its persistent nature, particularly the core inflation rate, slightly above 4%.

Both government and private sector spending remains strong, with high foreign spending and residential investment due to homeowners holding onto low mortgage rates and ongoing inventory rebuilding to meet consumer demand.

During the Federal Open Market Committee's latest meeting on December 13, 2023, a unanimous decision was made to maintain the key federal funds rate in a target range between 5.25% and 5.50%.

2024 Consumer Price Index (CPI) and real Gross Domestic Product (GDP) predictions
The CPI has risen by 3.2% over the past 12 months. Projections indicate a decrease to 3% in 2024, approaching the Federal Reserve's target of a 2% CPI rate. This is a positive trend, considering the previous year's peak of 9% year-over-year (YoY) inflation rate.

On the real GDP front, growth is expected to be 1.5% in the upcoming year, a slight decline from the current year's 2.5% growth. Relatively high-interest rates throughout 2024 are anticipated to keep real GDP growth at a lower but reasonable level.

2024 mortgage rate prediction
Current U.S. 30-year fixed mortgage rates range from 6.75% - 7.25%, depending on the state. The expectation for 2024 is a one-percentage-point decrease, influenced by the recent drop in the 10-year treasury from 4.7% in November to 3.9% in December.

Looming liquidity crisis in 2024
The primary concern is the liquidity risk of deposit runoff at banks and credit unions. Credit unions may face challenges in retaining deposits, with a significant decrease in assets allocated to cash and investments over the past year. The decline in the surplus funds to asset ratio, from 36% one year ago to 24%, signals a potential liquidity squeeze.

Credit unions need to be prepared for a liquidity crisis that could hit in 2024 by performing routine assessments while monitoring the economic landscape. Practicing these preventative behaviors could help you respond proactively to market changes.

Credit unions are particularly vulnerable to a liquidity shortage, attributed to weak deposit growth and stronger loan growth. Forecasts suggest 3% deposit growth in 2024 due to a decrease in the money supply by nearly 5% YoY. The competition for a reduced pool of deposits has led to an increase in deposit interest rates.

Supporting credit union members in 2024
Despite the challenges, credit unions maintain a bright spot for members. Credit unions continue to offer competitive loan rates, outperforming traditional banks. Last year's market share surge was attributed to the strategic advantage gained during the Federal Reserve's interest rate hikes, where credit unions implemented gradual rate adjustments. This approach will persist in 2024, with credit unions maintaining lower rates to stay competitive.

The U.S. economy is expected to continue its slow but steady expansion, supported by incremental growth in key areas. However, credit unions should prepare for a potential liquidity crunch in 2024 with historically low deposit growth in the industry. Also, expect the Federal Reserve to be cautious with interest rate adjustments but anticipate drops in the latter half of the year.

The views expressed here are those of the author(s) and do not necessarily represent the views of TruStage.

Visit TruStage.com to learn more about our products and services.

Member Business Financial Services, LLC (MBFS) stands as a beacon of support for credit unions seeking to extend their member business lending services to the local business community. Owned by credit unions themselves, MBFS leverages this unique perspective to empower credit union partners to provide more business loans at a lower cost than they could individually.

Since its establishment in 2008, MBFS has grown exponentially, managing more than $2.5 billion in commercial loan balances for more than 100 credit unions nationwide.

The MBFS Difference:

• • No Membership Fees
• • A La Carte Pricing
• • Comprehensive Training Programs
• • Relationship Manager Access

What MBFS Can Do for You:

MBFS's seasoned team provides invaluable strategic development assistance to credit unions, whether they're launching new member business lending programs or expanding existing ones. From nationwide loan underwriting and document preparation to loan funding, servicing, and portfolio management, MBFS offers a holistic suite of services to enhance credit unions' business lending capabilities. Additionally, MBFS facilitates coordination of loan participations, enabling credit unions to grow their portfolios efficiently.

MBFS Comprehensive Customized Training:

Enhance your credit union's proficiency in member business lending through MBFS's tailored training programs. Whether it’s business loan programs, strategic program development, loan policy development, or risk management, MBFS offers customized training sessions to meet your credit union's specific needs. These sessions are available both in-person and virtually, ensuring accessibility and flexibility.

Ready to unlock the full potential of your credit union's member business lending services? LEVERAGE and MBFS are here to guide you every step of the way.

Check out https://myleverage.com/solutions/mbfs.php or contact a LEVERAGE Business Development Consultant at consult@myleverage.com to learn more.