The low-interest-rate environment, combined with years of dire NCUA warnings about staying away from long-term investments, has left credit unions wondering exactly how they are expected to generate income. Credit Union Journal asked attendees of the CFO Council Conference in Anaheim, Calif., how they deal with this quandary.

Alan Wade, EVP and CFO, Member One FCU, Roanoke, Va.

We are investing in our members by lending. We have not added to our term-investment portfolio for three years. We get better yield by lending than investing, and that gives us better service to the members.

Melinda Redman, CFO, FreeStar Financial CU, Mount Clemens, Mich.

We are lending as much as possible. I try to stay less than five years on investments. We have gotten into indirect lending in the past couple years, we have purchased some loan participations and we do mortgages. We sell 30-year fixed loans to Fannie Mae to limit interest-rate risk, but we retain servicing and the relationship with the members.

Adrian Johnson, SVP and CFP, MECU of Baltimore

We have been staying in a three- to five-year range on our investments. We like cash flow products because we like our investment coming back. We have been conservative, so we see reduced earnings, but NCUA likes us. One day rates will go up, and will stay up, so the question is: are you nimble enough to be ready? We feel we are.

Girado Smith, EVP and CFO, Educational Systems FCU, Greenbelt, Md.

We manage our portfolio in a manner we can function if rates are going up or down. We have looked for some yield in the two- to four-year part of the curve. We have stayed short in case rates go up. Much of our portfolio is amortized products. We invest in some private label CMOs, which pay more but carry a little more risk. Rates are going to go up at some point, the question is: how much? We feel we are ready for when they do.

James Sessa, SVP of administration and CFO, Coast Central CU, Eureka, Calif.

I don't do anything different than I have since the early 1980s. The key is to always know that you don't know everything, and stick with the basics instead of buying the latest gadgets. We sell cash, so we have to make sure people can pay it back. The recession was just a blip for us because we made sure the members who took out a mortgage from us could afford the house and the drapes and the washer and dryer. We lost a lot of business to WaMu, but look what happened to them. My loan-to-asset ratio is less than 50%. My investment strategy is to look at the total picture, not just one piece.

Bianca Moore, controller, West Community CU, O'Fallon, Mo.

We are not doing a whole lot of new investing, but we are focused on lending. We are more than 90% loaned out.

Zelda Abram, CFO, MidFlorida CU, Lakeland, Fla.

We are really not investing as much, so we are doing more lending. We are focusing on our balance sheet. We are looking to be positioned well when rates rise. We are not holding any longer-term mortgages, we are selling those.