ARLINGTON, Va.—Despite a favorable outlook on the future of lending, credit union leaders stance on the economy and their credit union’s performance weakened in July, according to NAFCU’s latest Credit Union Sentiment Index (CUSI).
The CUSI is an index based on NAFCU member responses to eight questions on growth and earnings outlook, lending conditions and regulatory burden.
The CUSI fell in July, as declines in respondents’ outlooks on growth, earnings, and regulatory burden more than offset an optimistic outlook on lending.
"The overall index remains in optimistic territory, but only slightly so, while the earnings component fell into the pessimistic range,” suggested NAFCU’s Research Team.
Separately, the July edition of NAFCU's Economic & CU Monitor report touched on the CFPB’s proposed rule to address the quickly approaching sunset of the government-sponsored enterprises (GSE) Patch as well as the Bureau’s proposed changes to its general qualified mortgage (QM) loan definition, replacing the debt-to-income (DTI) threshold with a comparison of the loan’s annual percentage rate (APR) to the average prime offer rate (APOR) for a comparable transaction.
Responses on Other Issues
Survey respondents were asked to share their preliminary thoughts on the CFPB’s new approach and some suggested that the APOR approach might be harder to implement, NAFCU said.
Most respondents anticipated that if the Bureau adopted its revised definition for the general QM as proposed – adopting a price-based approach tied to APOR – then the “composition of their loan portfolio would still be 75 to 100% QMs,” wrote NAFCU’s research team in the report.
Additionally, respondents reported that they did not anticipate the proposal having a material impact on their decision to originate QMs in the future.