MONTEREY, Calif. — Though net income, ROA and net worth ratios are expected to fall in 2008 and 2009, credit unions shouldn't put too much effort into offsetting them, CUNA Chief Economist Bill Hampel warned directors attending the Big Valley Educational Conference this morning.
"You didn't cause these problems, so think twice before attempting to fix a problem you didn't cause," Hampel said. "The problems you're seeing aren't due to bad decision making or loan policies, and they won't last long."
The economist, who makes no secret of his belief that 11% net worth ratios are too high, said credit union capital is more than adequate to weather today's economic woes, and credit unions should avoid the temptation to jack up fees or slow deposit growth.
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"You've been saving up that capital for a rainy day; well, it's starting to rain," Hampel said, adding, "For an umbrella to protect you against the rain, you've got to open it up. You must use that capital or you'll get soaked."
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