DES MOINES, Iowa-A steadily improving economy presents benefits as well as concerns for credit unions, according to the CEO of The Members Group.

Shazia Manus, while admitting any economic forecast stands just as much chance of being wrong as right, sees a steadily improving economy during the second half of the year and into 2013. Manus expects improvements in the unemployment rate, the housing market, and consumer confidence will bolster GDP growth.

If the economy continues to recover, CU loan delinquencies will come down, charge-offs will fall, as will provisions for loan losses, she said. That will drive ROA and capital upward, and Manus said CUs should have plans for leveraging that income, particularly in the areas of mobile banking and member onboarding.

"Credit unions have to have a strategy for mobile banking, not just a plan to get into it. They should look at what products and services can be integrated into mobile banking, such as Loanliner, and look at ways information can be issued through mobile channels."

Getting Onboard

With all the anti-bank sentiment, Manus feels credit unions need to improve on-boarding methods to take advantage of the movement away from banks and create profitable members from the converts.

But if the economy improves too soon, particularly if the unemployment rates dips quickly and consumer credit demand picks up sharply, then the Fed may not hold to its position of keeping rates down into mid-to-late 2014, and will raise rates.

"That will have a huge impact on credit union balance sheets," said Manus, who encouraged CUs to play even greater attention to asset/liability management this year and next.

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