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Economic Update

Economic Update. Jordan van Rijn Senior Economist, CUNA PhD Candidate, UW-Madison September 17, 2018 CUNA Collections & Bankruptcy School. Overview. Credit Union Impact Update on the Economy & Forecasts Credit Union Trends & Forecasts Safety & Soundness at Credit Unions vs. Banks.

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Economic Update

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  1. Economic Update Jordan van Rijn Senior Economist, CUNA PhD Candidate, UW-Madison September 17, 2018 CUNA Collections & Bankruptcy School

  2. Overview • Credit Union Impact • Update on the Economy & Forecasts • Credit Union Trends & Forecasts • Safety & Soundness at Credit Unions vs. Banks

  3. Credit Union Impact

  4. $10.9 Billion

  5. Economic Overview

  6. Leading Causes of Bankruptcy • Medical expenses – 42% • Job loss / Unemployment – 22% • Uncontrolled spending – 15% • Divorce – 8% • Unexpected disasters – 7% Source: https://www.clearbankruptcy.com/financial-literacy/10-leading-causes-of-bankruptcy.aspx

  7. What does this mean for credit unions?

  8. 12-Month Growth in CU Memberships (%)Source: NCUA and CUNA

  9. Concerns • Rising interest rates • Trade war • Driverless cars / Ridesharing • Fintech competition • Regulatory changes

  10. Safety and Soundness at Credit Unions vs. Banks

  11. Compensation and Safety and Soundness • Performance-based incentives linked to: • Short-term planning • Excessive risk-taking • Fraud • Earnings manipulations • Shareholder lawsuits • Product safety problems • Sabotage and uncooperative behavior between workers • Financial crisis of 2008-2009

  12. Credit Union vs. Bank Failures

  13. Thank you Jordan van Rijn Senior Economist, CUNA PhD Candidate, UW-Madison jvanrijn@cuna.coop

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