April 2, 2013


  • Henry - the point of the article appears misunderstood. The primary purpose of the article was to share our practices that lead to improvements in our lending application and process, expansion of new products, and looking for new opportunities. As you stated approx. 67% of our loan portfolio are 1st mortgages, but that one statistic doesn't tell the whole story. What you failed to tell is that San Francisco FCU's net long term assets to total assets ratio as of 12/31/2012 is 37.1% compared to Safe CU's ratio of 39.6%. We share the same concern as many others about rising interest rates and have employed (and monitored) a strategy utilizing our investment portfolio that mitigates interest rate exposure. Your claim that you "doubt" we have mitigated this risk is simply unfounded and false. We employ both a robust interest rate sensitivity and credit risk analysis utilizing a third party. We calculate both short term and long term impacts and a deeper comparison of our statistics would reveal that the San Francisco real estate market has performed very differently than the Sacramento area. In conclusion, I don't know how sharing improvements to the lending process, expansion of products, and expanding into new markets is setting a bad example for the industry. I would be happy to discuss with you our interest rate sensitivity strategy and credit risk mitigation process at greater length.
    Steven Stapp
  • Althea - a taxi medallion is a license to own/operate a taxi, usually found in metro markets such as New York, Chicago, San Francisco, etc. The local transportation authority regulates the number of medallions that are available.
    Steven Stapp
  • Risk with forthought!
  • I am amazed that given the high concern among regulators and CEOs about interest rate risk you would profile this credit union. As of 2012 year end they had 67% of their loans in first mortgages. I don't know of any credit union that has hedged interest rate risk so I doubt they have done that. On the other side of the balance sheet they have two thirds of their deposits in core deposits (MMA, regular shares and share drafts). I expect more careful analysis from Callahans than this. It appears that lately your articles are promoting what I consider to be bad practices. At least on the surface it appears that many of the credit unions you profile are taking outsized risks. I know we have to meet member needs and we have to manage risks. But when there is no side story to show that they are managing the risks and measuring the risks and that the risk/reward is calculated--I fear you are setting bad examples.
    Henry Wirz
  • I enjoyed this article which gave me some good ideas for my credit union. What is a "taxi medallion"? It would help me understand that aspect of the article. Thanks.