A Note From Chris
It was great to see so many of you at the Wisconsin State GAC. Thanks to The League for hosting this significant event. I encourage everyone to consider attending CUNA’s GAC in late February/early March to promote all the wonderful things credit unions do for their members and communities. Listening to all the heartwarming stories of how credit unions are helping people is remarkable and a great reminder of why we do what we do.
Now that 2023 is in full swing, we are focused on ways to bring credit union leaders together to learn and exchange valuable information that will help credit unions prosper. Providing our members with educational opportunities and easy access to industry expertise is a high priority at Corporate Central. We welcome your recommendations for educational topics and your credit union’s specific needs. We strive to provide quality educational offerings surrounding relevant topics and aim to deliver engaging events. Visit the events page on our website to learn more and register for upcoming events.
Calling all digital marketers! Corporate Central will be hosting our annual Digital Marketing Forum on Wednesday, March 22. The virtual forum will feature session topics including SEO, Google Ads, and social media marketing. CPE credits are available for eligible attendees. Marketing professionals, business development professionals, and C-level executives or any other positions involved with marketing decisions should attend this event. Learn more about the forum and register for the event on our website.
Sincerely,
Chris Felton
President/CEO
Did You Know?
Corporate Central partners with a nonprofit to offer private loans to help students pay for college.
Corporate Central partners with ISL Education Lending to offer private loans to help students pay for college as well as refinance existing student loans. ISL Education Lending is a nonprofit organization with decades of student loan experience offering lower-priced loans.
Corporate Central will be hosting a complimentary webinar on Thursday, February 9 where members can learn how to:
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Secure new members and re-engage with your student borrowers
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Offer a comprehensive suite of student lending options with industry-leading interest rates
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Offer a Student Loan Refinance program to tap into new markets and differentiate yourself from big banks and Fintechs
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Take advantage of our Third-Party Servicing Solution, a turnkey loan origination and loan servicing solution
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Technology Solutions
Think|Stack awarded 2022 regional and global AWS Partner Award.
At the end of 2022, Think|Stack was recognized by Amazon Web Services (AWS) as global Non-Profit Organization Partner of the Year winner, one of many AWS Partners around the globe that helps customers drive innovation. Think|Stack was recognized for playing a key role helping customers drive innovation and build solutions on AWS.
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Employee Benefit Resources
Registration is open for these exciting upcoming events from InterLutions.
Credit Union Forum: Employee Retention and Culture
Tuesday, February 7 from 2:00 p.m. to 4:00 p.m. CT
In-Person at Ascentra Credit Union in Bettendorf, IA
If you haven’t explored the Employee Retention Credit (ERC) under the CARES Act, you could be missing out on a potential six-or-seven-figure payout. Our first session dives into the details of the ERC, how to qualify, the processes involved in filing, and the benefits and payouts available to credit unions of different shapes and sizes. Our second session offers insight into how credit unions can improve their culture – specifically focused on enhancing the delivery of your employee benefit programs. Your benefits approach should not be a dreadful process and your healthcare costs should not be increasing at the pace they have for so many years. Attendees will learn how to leverage specific credit union healthcare claims data to negotiate lower premiums with major insurance carriers. Every attendee joining the session will receive a free copy of our CUSO’s latest white paper, titled: The C-Suite’s Guide to Enhancing Employee Benefits and Reducing Costs.
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A CUSO’s Healthcare Solution for Small Credit Unions
Tuesday, February 14 from 1:00 p.m. to 1:30 p.m. CT
Webinar
Small credit unions and their employees continue to pay more for health insurance while the carriers continue to profit. Big insurance brokers struggle to scale down and deliver competitive products to small credit unions. Small insurance brokers often deliver un-tailored products that don’t fit the needs of small employers. InterLutions, a CUSO specializing in employee benefits, recently launched a solution to broker competitive medical plans for small credit unions. After thorough evaluation with a small credit union advisory council, along with a detailed healthcare feasibility study, InterLutions truly understands the challenges small credit unions face with rising medical insurance costs and has developed customized solutions to help. Join the InterLutions team for a complimentary 30-minute webinar to learn how their customized solutions are helping small credit unions offer affordable and quality employee health plans.
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Financial Services Consulting
Will the Fed pivot this year, or won’t they?
Both stocks and bonds have started 2023 on the upside. The Fed has continued to follow its expected path, that the market consensus that has been in place for the past six months will become reality. That consensus looks for the Fed to reduce the size of its rate hikes to 25-basis points moves beginning February 1. Another 25-basis point hike is expected in March and perhaps one more in May or June bringing the Fed funds target to 5.00 or 5.25%. After a short rest, the consensus opinion calls for the Fed to reverse course in the second half of the year shifting to an accommodative policy. Effectively the consensus calls for the Fed’s target to return to present levels by their January 2024 meeting.
There are many significant indicators pointing to this rate path. The Fed funds futures market reflects this expectation with trading mirroring these levels for future settlement. The inverted Treasury yield curve points to a shift in rates, priced for lower rates ahead. The Fed itself has been very transparent as it relates to anticipated rate hikes. Inflation has cooled in the past six months as the Fed has implemented its historic tightening. Higher rates have slowed the real estate markets and started to lower housing costs, a major component of CPI. With the Fed following the projected path, market consensus has become more convinced that it has figured out where rates will go in the months ahead.
As always, this rate path should be taken with some degree of skepticism. History has documented the inability of anyone to accurately forecast interest rates. For their part, the Fed agrees with at least the first half of the consensus expectations. In their “DOT plot,” where members of the Fed members who have a policy vote, provide their rate projections, they share an anticipation of a 5.00 to 5.25% peak in the Fed funds target. However, the Fed does not subscribe to the “pivot” in the second half of the year. They project that the peak rates will be in place at the end of 2023. In the past month, the Fed has been vocal that they do not envision a downward shift in their policy for the foreseeable future. The pivot to an accommodative Fed is a critical piece of the consensus that is currently priced into the markets.
Some dismiss the Fed’s warning that it has no intention of pulling back on rates as “market talk” to ensure their tightening program is as effective as possible. This could be the case. Others have stated that it will be difficult for the Fed to bring inflation back down to their 2.00% target this year and will be hesitant to jeopardize reigniting it with rate cuts so soon. The economy, both globally and domestically, will likely have a large voice in what ends up happening. Much of the consensus was built on anticipation that the economy would crumble under the massive tightening the Fed has been creating. The thought was that the Fed would be forced to quickly pivot to help the economy recover. It was difficult to see a scenario that the economy would not be brought to its knees with such a spike in interest rates. It has, however, shown more resilience than expected. Employment has remained solid with the Fed concerned about the strength of the wage component buoyed by demand for workers. Inflation has damaged budgets but up to this point, consumers are continuing to spend money. We will see how long these two components hold up as the months go by. Without economic distress, the Fed will unlikely be motivated to take their eyes off inflation.
Will the Fed pivot this year, or won’t they? If we do go down the consensus path the pivot is basically priced in. If we hit midyear and see the consensus shifts away from the pivot, we will likely see the yield curve flatten as participants expect rates to creep higher than expected or remain at their peak for a longer period. Either way, buyers will lose some of their appetite for lower rates on longer maturities. With short rates climbing 400-basis points in 2022 while five-to-seven-year paper rose closer to 250-basis points, the latter will have to make up some ground to entice interest. The flatter yield curve will have ramifications not only on your investment portfolio but more importantly, on your entire balance sheet.
The importance of your ALM program is magnified in today’s environment. Looking at the consequences of a shift in the yield curve is highly recommended given the Fed pivot that is currently priced into the markets. The 180-degree shift in liquidity suggests another look at non maturity deposit durations, again with what if scenarios under various possibilities on that front. The surge in rates last year also provides a great time to reexamine your assumptions. How close were you to projected deposit and loan rates under the up 300 scenarios plugged into the model a year ago?
I hope we’re not breaking the news to you that no one knows what path rates will take going forward. Understanding how your credit union is positioned for the path you feel most likely along with the results if they zig or zag will eliminate surprises and keep you on solid ground. Need help? Give us a call. We are your corporate and stand ready to help.
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What’s Trending?
Statement by Chair Harper on CDRLF funding, CLF, and vendor authority.
NCUA Chair Todd Harper recently released a statement on funding for the NCUA’s Community Development Revolving Loan Fund (CDRLF) grants, the Central Liquidity Facility (CLF) agent-member provision, and vendor authority.
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Credit Unions Connect
Stories that exemplify the movement
Game of Giving raises funds for the homeless.
Collins Community Credit Union recently joined the Cedar Rapids RoughRiders for their annual Game of Giving. They presented a check to the Teufelhund Veterans Group, who then signed the check over to support Willis Dady Homeless Services. They are grateful to be able to contribute to the incredible work both organizations are doing.
Giving back to the community.
Great Lakes Credit Union is starting 2023 off strong with their volunteering efforts, spending time at Lyon Magnet Elementary School’s Family Reading Night, COOL Ministries, and Care for Real. They look forward to more opportunities to give back in the year ahead.
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What’s New and Who’s Who
Corporate Central welcomes Bonnie Kwitek as an Office Assistant.
Corporate Central is excited to welcome Bonnie Kwitek as an Office Assistant. Bonnie provides organizational and clerical support including data entry, preparing, and maintaining files and other documentation in addition to providing back-office and phone support, assisting with the preparation and maintenance of various reports, procedures, and correspondence, and will provide assistance in scheduling and planning meetings as well as other essential duties to support members and the Investment Department. Welcome Bonnie!
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Frederick Blask earned NCBSO designation.
We are proud to announce that Frederick L. Blask, NCBSO, NCRM, Vice President Governance Risk & Compliance, has earned the prestigious designation of NAFCU Certified Bank Secrecy Officer (NCBSO). According to NAFCU, “Being an NCBSO means that you are prepared to protect your credit union against money laundering threats. It also demonstrates to NCUA and FinCEN you are dedicated to BSA compliance. This certification can only be obtained during NAFCU's BSA School. At the end of the school, attendees may take an optional exam to earn their NCBSO designation. The exam consists of no more than 50 multiple-choice questions that are derived from content covered throughout the BSA School program.” Way to go, Fred!
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Will Valadez promoted to Human Resources Business Partner.
We are pleased to share that Will Valadez has been promoted to Human Resources Business Partner. In this role, Will partners with business leaders to strengthen company culture and the employee work experience through effective strategic planning and competitive business strategy. He identifies, develops, and implements proactive business and talent initiatives to assist the employer of choice objective. He also collaborates with the HR department to align the human resource function to organizational goals and objectives while overseeing and maintaining optimal function of the organization’s human resources information system (HRIS). Congrats, Will!
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Brittany Poe earned BSACS designation.
Corporate Central is proud to announce that Brittany Poe, BSACS, Risk & Compliance Coordinator, has earned her Bank Secrecy Act Compliance Specialist (BSACS) designation. According to CUNA, “The BSACS designation showcases your commitment to identifying the latest forms of illicit financial activities and understanding evolving Bank Secrecy Act (BSA) and anti-money laundering (AML) laws.” Nice work, Brittany!
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Michael Baumann promoted to Investment Analyst.
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Corporate Central is proud to announce that Michael Baumann, MBA has been promoted to Investment Analyst. In this role, Michael performs analysis on current and potential investment holdings of the organization. He also performs economic, market, and sector analysis; assesses borrowing limits and performs credit evaluations on member credit unions; sells investment and loan products to member credit unions; provides monthly reporting for the Board and Asset Liability Committee (ALCO), and performs functions related to member security safekeeping. Congratulations, Michael!
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Adam Stone promoted to Executive Vice President of QuantyPhi.
QuantyPhi recently announced that Adam Stone has been promoted to Executive Vice President. In addition to his previous responsibilities, he will now have oversight over all investment and consulting processes. Adam rejoined Corporate Central and QuantyPhi as Vice President ALM & Investments in May 2020. Since then, his primary responsibilities have included managing the consulting and ALM programs for member credit unions. With this promotion, he will now additionally oversee the sales of investment products to member credit unions as well as the execution of QuantyPhi’s business plan and growth initiatives. Congrats, Adam!
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Corporate Central celebrates Dawn's 25th anniversary.
Every once in a blue moon, a person comes along who brightens your day, makes you smile, does incredibly nice things without being asked, makes you look really good, cares relentlessly, plans like no one you have ever met, instinctively involves everyone, and ruthlessly places the best interests of Corporate Central first and foremost. For 25 FABULOUS years, Dawn Beyer has done all that and more for us, for our Board of Directors, and for our members. Congratulations, Dawn!
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