The stage is set for interest rate hikes, giving credit unions an opportunity
to demonstrate their mission: providing members with expert and unbiased financial
In the aftermath of 9/11, the message from Washington to America was "go
shopping." Consumers listened. Higher consumer debt levels - on a relative
basis - was the result of the 45-year low rate of 1 percent.
The Fed finally raised the benchmark funds rate, increasing it by a quarter
of a percentage point at both their June 30 and August 10 policy meetings.
The current market is preparing for further interest rate increases.
Statements made last week by Federal Reserve Chairman Alan Greenspan and
Atlanta Bank President Jack Guynn reinforced to the financial markets their
support for further rate increases. Acknowledging the recent "soft patch"
in job growth, both officials reiterated their intention to "stay ahead
of inflation" and keep the Fed in a neutral setting.
Credit Unions Need to Advise Members with Changing Economy
Credit unions need to recognize the impact on their members of the Federal
Reserve's decisions and act accordingly. Members' decision processes will
be very different than it was a year ago. With the current level of consumer
debt and the rising interest rates, more members will be searching for financial
answers in future planning.
Today's leading credit unions have leveraged the latest technology and added
to their websites financial planning and educational calculators. These include
complete with information content zones that cover topics as wide-ranging
These tools provide a resource to members and allow credit unions to disseminate
more information than a brick and mortar setting. Calculators have proven
to be a "win win" for credit unions and their members.
For more information on how you can better serve your member and improve
your website with calculators call Jon Jeffreys at 800-237-5678.