As we head into summer, credit unions across the country are navigating an interest rate environment in flux, shifting liquidity needs and mounting member self-serve expectations. We’re committed to helping our member credit unions make sense of it all so you can stay focused on what matters most: serving your members.
The Current Landscape: Cautious Optimism
After a volatile few years of inflationary pressures and aggressive rate hikes, the Federal Reserve signaled a slower pace of movement in early 2025. While inflation has cooled from its peak, it remains slightly above the Fed’s long-term target of 2% as of Q2 2025, and markets remain sensitive to new data and economic projections.
Most Fed policymakers anticipate one or two rate cuts by the end of the year, depending on inflation data and labor market trends. Meanwhile, the yield curve remains modestly inverted, prompting cautious positioning from institutional investors.
What Credit Unions Should Keep an Eye on This Summer
Rising delinquencies: As delinquencies have increased, particularly jettisoning defaults among those with federal student loans that just restarted reporting, nearly all lenders have tightened their lending criteria, including credit unions.
Underwater investments: Some credit unions got caught up in low-interest rate investments that are no longer serving these credit unions or their members. Contact LaCorp today to see what we can do for you.
Decreasing lending: Correlated with the increasing delinquencies and tighter lending standards, outstanding loan balances on consumer loans have declined at credit unions since Q1 2024. Investing excess funds appropriately will be key.
We urge credit unions to remain vigilant with asset-liability management (ALM) and liquidity stress testing in light of economic uncertainty.
LaCorp’s Member Insights
- Leveraging short- and mid-term investments strategically to maintain flexibility while capturing yield.
- Diversifying investment with tools like SimpliCD without added operational burden.
- Turning to LaCorp for guidance on profitability planning, ALM strategies and more—as new leaders and seasoned executives alike seek validation and collaboration.
One of our core strengths is offering true partnership, not just products and services. We listen, analyze, and respond with customized solutions tailored to your needs.
How LaCorp Can Help
SimpliCD Issuance. Place funds efficiently into multiple federally insured institutions with just one transaction—saving time and effort. Read more in the article, Pelican State Credit Union Leans on LaCorp for SimpliCD.
Money Market Accounts. The highest advertised rates among corporate credit unions and secure storage of excess liquidity—ideal for temporary positioning or core reserve strategies.
ALM Support. Access our experienced team for portfolio reviews, scenario analysis and second opinions to guide strategic decisions.
Your Next Step
Summer is an ideal time to evaluate and adjust your liquidity strategy before year-end planning ramps up. Whether you're facing reinvestment challenges, margin compression, or operational capacity concerns, LaCorp is here to help—personally and proactively.
Contact your LaCorp team member today to schedule a summer investment review. We’ll help you assess your portfolio, identify opportunities to boost profitability and lighten your load.