At the same time the Loan to Share ratio for US Credit Unions trending up for the first time since Q3 2019. This is partly cyclical (Q1 usually downticks), but we think the modest reversal is a significant signal for Treasury managers to be aware of. If Q3-20 moves in the same direction a market shift is likely being established.
Can you see these behavior signals in your Credit Union?
If you take a look at your own Credit Union, we expect you will see some powerful shifts emerging in Member deposit liquidity and term preferences. With the economy showing signs of inflation and the Fed signaling interest rates will rise, consumers are shifting out of longer-term deposit certificates into short-term vehicles with 6-month terms, cashable features, and money market accounts.
If you don’t have the ability to see these kinds of shifts in your data please talk to us – we can solve that problem for you.
The pandemic has seriously disrupted all of our lives, the economy, and consumer behavior. Historical models have lost their relevance as we have been navigating uncharted waters. One of the keys to managing your Credit Union now and over the next few years will be making sure you can see the signals that indicate changes in Member behavior – in other words being aware of changing Member needs. After all, a Credit Union’s purpose is to meet those needs to help Members achieve their financial goals.