Reading, ‘Riting and Interest-Rate Risk: The Value of Education

To stay genuinely competitive, we need to continue educating ourselves.


During the last few years, credit unions have seen significant changes in their balance sheets and operating environments. The boom in the housing market has been the primary vehicle of change for credit unions. Demand from credit union members for mortgages and for home equity lines fueled a surge in mortgage-related lending at credit unions. And although credit unions have addressed these developments in order to meet member needs, not all were fully educated on how these changes could impact their financial well-being. While it is vital to offer the products and services members demand, it is equally important to understand the risks that meeting those demands introduce to the balance sheet.

We must carefully consider how interest rate movements will affect our balance sheets, our earnings, and ultimately the products we offer our members. If liquidity becomes an issue, how do we cope with deposit pricing? How should we meet loan demand if deposits start to decline again and the price of retaining deposits rises? With the new on-line competition from the likes of ING, credit unions are facing an entirely new type of competitor. The bank down the street with similar overhead concerns is no longer the only competitive force to be reckoned with.

Basic knowledge of ever-changing market conditions and industry trends is a prerequisite for everyone at all levels of the credit union industry, and there are various ways in which it can be obtained. Clearly one of the most convenient ways is by reading industry publications, particularly magazines that focus on providing explanation and discussion of investment and balance sheet management issues. There are also many other credit union industry publications with various themes ranging from leadership to technology and compliance.

Of course, there is no substitute for specialized, interactive training to meet specific needs. The convenience of live webcasts and online training is proving increasingly popular for this purpose. Essentially, both forums ensure that you do not have to leave your desk to participate. A live webcast has the advantage of being current and is an unmatched way of keeping large groups of people up-to-date on a wide range of issues. Online training is better suited for acquiring and developing specific skills at a desired level. An online ALM training program, for example, might offer board members an understanding of how derivatives reduce risk on the balance sheet, without requiring them to know how the actual transactions are executed and accounting issues resolved.

Industry events, forums and seminars also provide an invaluable opportunity to participate in first-hand discussion of topics that are both in-depth and relevant. While there are a growing number of trade shows and conventions across the nation, educational conferences are less frequent, and it makes sense to take advantage of them as they occur. Such events are outstanding resources to help you keep up with regulatory and technology issues, as well as trends in balance sheet and investment management, pricing and marketing. WesCorp’s annual Credit Union Outlook conference will be held in Las Vegas from September 17 – 20. This conference focuses on the economy, interest rates, balance sheet management, and other timely issues facing credit unions and has proved to be an extremely popular and highly anticipated event.

Educational resources, like those described above, are critical to improving our knowledge in the financial industry and putting that knowledge to work for the benefit of our members.

WesCorp is America’s largest corporate credit union with approximately $29 billion in assets and more than 1,000 member/owner credit unions throughout the United States. If you would like to learn more about Credit Union Outlook or any other aspect of WesCorp’s commitment to credit union education, please call (800) 442-4366, or visit