Interest rate risk

Credit unions need to be thinking about pressure on net interest margins and declining revenues.

The agency's semiannual report on risks in the industry focused heavily on the high volume of commercial loans as well as banks' exposure to nonfinancial corporate debt, which is near a record share of GDP.

A 2016 law expanded credit union powers in the Great Lakes State, but it also capped how CUs can invest in GSEs – a move that nearly cost one institution $6 million.

The industry’s profit was $60.2 billion, a more than 7% increase from the previous record set in the first quarter and a 25% leap from a year earlier, the agency said in its quarterly report on the industry's health.

One expert offers credit union leaders "the best defense against risk" and lessons from previous economic crises.

As interest rates rise, banks need to watch how much they are paying on deposits to avoid exceeding rate caps designed to ensure liquidity.

Focus instead on legislation that will prevent the next economic crisis and address technological change, says Rep. Patrick McHenry, a Republican front-runner to become Financial Services Committee chairman.

The remarks by the comptroller of the currency came as his agency released a new report on emerging risks in the banking industry.

After more than a decade, a rising interest rate environment is coming. Are credit unions ready?

Neither the central bank’s gradual raising of interest rates, nor its modest changes to capital rules are likely to meaningfully increase risk to the financial system.