Activities, policy initiatives, and accomplishments of the federal credit union regulatory agency throughout 2022 are detailed in its annual report released Tuesday.
The National Credit Union Administration (NCUA) looked at the past year’s most significant initiatives as well as what’s to come.
In his chairman’s message for the report, agency Board Chairman Todd M. Harper noted some of the agency’s top priorities for the year ahead, including focusing on cybersecurity risks, interest rate risk, liquidity risk, and credit risk. “To ensure the credit union system remains strong, the NCUA will also continue its efforts to enact needed legislative reforms related to the Central Liquidity Facility and vendor authority,” he wrote.
External factors expected to influence credit union performance this year, he noted, include expectations of modest economic growth, slowing job growth, and changes in the interest rate environment that “suggest the term spread could turn negative in the year ahead, squeezing credit union net interest margins,” he said, leaving an uncertain outlook for credit union loan growth and loan performance.
“Additionally, delinquency rates may drift higher, and inflation may remain elevated due to geopolitical events, supply chain disruption, and material shortages,” his message states. “With inflationary pressures and increasing interest rates, a credit union’s ability to manage its interest rate and liquidity risk will remain a crucial factor in 2023.”