ARLINGTON, Va.—Just two months after hitting its all-time high, a measure of credit unions’ outlook for growth, earnings and lending has had done a U-turn and hit its lowest point.
NAFCU is reporting its Credit Union Sentiment Index (CUSI), an index based on NAFCU member responses to eight questions that also includes views on regulatory burden, sunk to the new low. The findings were published as part of its Economic & CU Monitor.
“Respondents' souring assessment of lending conditions was behind the fall. A positive outlook on the economy had the greatest impact on the growth component, and the economy, interest rates and loan demand had positive impacts on the earnings component,” NAFCU stated. “However, loan demand and applicant quality continued to drop in the lending component and the regulation component showed a mild improvement.
NCUA’s Increased Focus on Cybersecurity
Separately, the degree to which NCUA is stepping up its focus on cybersecurity can be seen in a new survey that found CUs saying the portion of their exams dedicated to cybersecurity has increased substantially from 2017 to 2018. Those same respondents told NAFCU's October Economic & CU Monitor survey the number of IT compliance employees have nearly doubled since 2010.
According to survey respondents, 82% reported that they were impacted by a local merchant breach within the past two years.
Under current law, financial institutions, including credit unions, are governed by the Gramm-Leach-Bliley Act. NAFCU noted that it has been advocating for the creation of a national data security law, which would hold merchants, financials and other entities to standards similar to those currently upheld by financial institutions.
As CUToday.info reported earlier, NAFCU Chair Jeanne Kucey in testimony during NCUA’s budget briefing last week expressed concern that NCUA cybersecurity related expenditures – which have no clearly articulated limits – may be driving costs disproportionately and will continue to result in yearly budget increases at the NCUA. NAFCU noted that it has asked the NCUA to delineate a clear standard for measuring the impact of cybersecurity investments relative to risk reduction during the exam process to ensure that such investments are serving their intended purpose.