With balance sheets returning to strength after years of recession and restricted lending, there are two main issues that credit unions have to address — low interest rates and increased regulation — which show no sign of letting up.

These two challenges pull credit unions in opposite directions. Historically low interest rates have led to a razor-thin spread, pushing credit unions to take on more risk in search of growth. Meanwhile, the heightened regulatory environment often has precisely the opposite effect — reigning in risk to ensure balance sheets are capable of withstanding stress tests and economic shocks. Credit unions looking to actively expand have the added challenge of competing in a crowded market.

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