January 2023

A Note from Chris

Happy New Year! Ringing in a new year is cause for celebration, for spending time with family and friends, and for offering happy new year blessings. It’s also a time of reflection. It’s important to recognize the special symbolism that a new year brings. It should speak to new beginnings and fresh starts. Whether your new year resolutions are big or small, they can take a lot of effort. I hope you found time to relax over the holidays, enjoyed time with your loved ones, and did some calm reflecting as you prepared for a fresh start in this new year.

As I reflect on measures imperative for Corporate Central to better serve your credit union, I am proud to say that 2022 was another successful year. We experienced incredible growth while continuing to operate at strong capital levels. We will continue to focus our strategic priorities on leveraging technology to optimize your experience and our member service. We look forward to working with you and continually improving your entire interaction and experience with us.

I look forward to seeing many of you at The Wisconsin Credit Union League’s State GAC in a few weeks. This event is an important one for our movement. I always enjoy listening to all the amazing stories of how credit unions are helping the people in their communities. Remember, every voice matters! Wisconsin credit unions don’t miss this fantastic opportunity to share your unique and defining stories with legislators.

Here's to you, and to a happy, healthy, and successful 2023!

Sincerely,

Chris Felton
President/CEO

Did You Know?

QuantyPhi offers enhanced Mortgage Servicing Rights Valuation for credit unions.
QuantyPhi recently announced an enhanced Mortgage Servicing Rights (MSR) valuation model offering. QuantyPhi built the sophisticated model to calculate the value of a credit union’s mortgage loan servicing income on loans that have been sold, but for which the servicing rights are retained as an income stream.

The value of MSRs must be reported as an asset amount on the credit union’s call report and should be determined by calculating the net present value of all expected future income from servicing the loans. QuantyPhi’s model uses industry-best prepayment projections and distinct discount rates, applied granularly to each mortgage loan. Further, the results are shown under not only a base case interest rate projection, but also potential shocked rate environments to give an expected array of results based on future interest rate fluctuations.

QuantyPhi recently presented a webinar on the enhanced service offering. Interested credit unions can request the recording of the webinar by completing this form. More information about the service can be found on QuantyPhi's website.

Technology Solutions

Mitigate risk this holiday season: train your employees and members to be cyber smart.
The holiday season and year-end are a prime time for cyber-attacks. Think|Stack Director of Cybersecurity shares tips for training employees and members to mitigate cyber risk in this article for CU Times.

Read the Article

Employee Benefit Resources

15 small credit unions join I-Care’s health insurance solution.
InterLutions recently launched a comprehensive employee benefits program exclusively for small credit unions called the I-Care Health Plan. Delivered through our CUSO’s insurance agency, the I-Care Health Plan offers credit unions a competitive alternative for employee health care benefits through enhanced underwriting, pooled employee programs, and flexible plan designs.

We are excited to share that 15 small credit unions have joined the I-Care Health Plan over the past two months. A unique advantage of the program is achieved through enhanced underwriting strategies that have proven to deliver more competitive premiums to credit union employees. Furthermore, our medical claims reports demonstrate that credit unions are generally a healthier population than other industries, and thus deserve lower premiums.

If your small credit union currently offers a medical insurance plan to your employees, or if you are looking to deliver a competitive health plan to attract and retain quality employees, contact InterLutions for a free evaluation and quote.

I-Care: Employee Benefits Solutions | InterLutions

Financial Services Consulting

What’s in store for us in 2023?
The Federal Reserve dominated headlines in 2022 as they undertook a historic quantitative tightening campaign draining liquidity and pushing interest rates higher.

Entering the year maintaining its zero-interest rate policy, the Fed considered the elevated inflation rates “transitory.” By March they realized inflation had become a problem and started pushing rates higher. By year-end Fed Funds rate target had climbed 425 basis points. The Treasury yield curve inverted as market consensus forecasts look for the Fed to be successful in their fight against inflation by mid-2023 followed by a Fed pivot to an accommodative policy bringing rates back down. For the year, one-year Treasuries climbed 430 basis points to 4.68%, the two-year 367 basis points to 4.40%, and the five-year 269 basis points to 3.96%.

So, what’s in store for us in 2023? The inverted Treasury curve reflects market consensus that the Fed will continue to reduce their aggression peaking mid-year with a 5.00 to 5.25% Fed Funds target with the pivot bringing the target down by 50 to 75 basis points by the end of the year. This consensus is mirrored by implied levels currently seen in the Fed Funds futures market as well as the Federal Reserve “DOT” plot, showing Federal Open Market Committee members’ forecast of Fed Funds rates going forward. Important to note, however, is the Fed’s forecast does not reflect a pivot in 2023 but does forecast a drop in 2024.

Unfortunately, history has told us that even the Federal Reserve has a very poor track record when it comes to predicting rates. The yield curve and futures market also have proven to be no better than a coin flip when it comes to forecasting. To navigate your way through these changing markets, it is critical to use your ALM model to implement strategies for your individual balance sheet. It makes sense to steer towards your most likely rate scenario, but it is imperative to understand the results if yields travel a different path.

If you missed our December webinar, “Scrooged – The Market Version,” we are happy to send you a link to the replay. We looked at the path that brought rates to current levels, reviewed this consensus market opinion, and looked to the future with some “food for thought.”

This is an excellent time to back test your ALM model and review your assumptions. With a 300 plus basis point jump in rates in 2022, how close are your loan and deposit rates compared to those your model expected? Are your loan and deposit balances in line with forecast? As you depend on your ALM model to provide the numbers to drive income and control risk, it should be recalibrated to ensure it is generating the data you can count on. Need help on that front? We are only a phone call or email away. We’re your corporate. We’re here to help.

Contact Us

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.

Read the Press Release

Credit Unions Connect

Stories that exemplify the movement

Spreading holiday cheer.

United Financial Credit Union is grateful for the opportunity they had to give back to their community and brighten the days of some of their members that needed a little extra holiday cheer. The credit union surprised 14 families with a full holiday meal before Christmas.

12 days of giving.

As a part of their 12 Days of Giving, Members Cooperative Credit Union raised funds for Grand Rapids Yellow Ribbon Citizens Committee, a committee that works to ensure military families in the community are supported. The Committee acts as a liaison between the community and the military. They believe that commitment to awareness and support for all service members must not end when they return home from deployment and the yellow ribbons are untied.

Read More Credit Union Stories

Our Community
Corporate Central supports Christmas with the Vets.

Christmas with the Vets was started by Jeff “Doc” Dentice, a Vietnam veteran, in 1988. The event is designed to provide some holiday cheer to Veterans at the Milwaukee VA Medical center and is made possible through several fundraising efforts. Corporate Central has been a proud supporter of this event since 2016 and each year strives to do more.

In 2022, in addition to monetary donations by staff used to purchase items like jackets and clothing, Corporate Central was honored to provide Doc with 340 filled Christmas stockings (a tradition that began 4 years ago) to be handed out to the Veterans at the Zoblocki VA Medical Center in Milwaukee on Christmas Eve. This includes those staying in the hospital as well as those residing in the dormitories on the VA grounds.

 

What’s New and Who’s Who
Chuck Doherty has joined our team as Executive Account Manager.
 

We are proud to announce and welcome Chuck Doherty as an Executive Account Manager. Chuck will proactively develop strong relationships with senior level management of Corporate Central’s growing membership. He will promote the organization’s products and services while assisting leadership with marketing strategies, business plans, and sales objectives. He will also evaluate the needs and challenges of the nation’s largest credit unions to add new solutions to Corporate Central’s suite of service offerings.

Chuck spent more than 25 years at Fiserv in a variety of roles including leading a sales organization; managing relationships with large, complex clients; managing remote deposit of checks as a product in the earliest days of the technology; and directing the company's public relations. Earlier in his career, Chuck directed public relations and advertising at a Milwaukee area bank and grocery chain and was a business reporter at newspapers across the country. Welcome, Chuck!

Read the Press Release

Learn More About Our Team