State Charters Get A Look Ahead (But Not From The Fed)
Several hundred representatives of state-chartered credit unions and their regulators did a great deal of looking ahead here last week. But they weren't given any sense of whether or not the Federal Reserve will raise interest rates when it meets here this week.
Instead, those attending the National Association of State CU Supervisors' annual meeting were told by Federal Reserve Governor Susan Bies that she is confident the economy is continuing to expand.
"I think our direction is clearly up, but there's no urgency," said the Fed Governor during remarks at the annual NASCUS convention. "Clearly, if we had strong job creation, that might put things in a different perspective. We're not hitting all cylinders yet, and that gives us a little bit of time."
The Fed is expected to add another 25 basis points to the target rate for overnight FedFunds when it meets this week, the third increase in the short-term target over three months. Bies indicated the Fed might act again next week in its bid to tamp inflation. "We've got to get short-term interest rates above the rate of inflation," he told reporters after speaking to the state regulators.
Meanwhile, in her remarks, NCUA board members called on her state counterparts to encourage credit unions to consider multicultural marketing techniques and special services to attract underserved groups. She detailed the importance of services such as small loans, risk-based loans, volunteer income tax assistance, international remittances, financial education, member business loans, and affordable mortgages.
"These services not only increase membership," Matz observed. "They build loan volume, spread risks, and as a result, strengthen safety and soundness."