Balloon maturities have historically been used by commercial banks to manage interest rate risk and to maintain control over the loan. The balloon is a hard due date that forces the borrower to either pay the balance of the note in full or negotiate new terms. Most regional and national banks moved away from the short term (3-5) balloon years ago.
I have said these words many times in my 14-year credit union career. The saying is always in the context of a conversation with a banker colleague that inquiries about my life after leaving banking. I explain that I love always being able to think and plan in a longer time frame than weekly results or quarterly earnings for clients that always act in their member’s best interest.
Let’s Get Ready! Part 2: Administration
In my last article, I outlined three major areas of preparation for the MBL rule change, which goes into effect on January 1, 2017:
Because we covered the board and staff issue in my previous article, this month we will discuss administration. Beginning next year, examiners will spend a fair amount of time assessing the effectiveness of your credit union’s credit administration. This question puts it more simply: Are you managing the relative risk that your MBL portfolio presents to your credit union?
NCUA alters regulatory approach to member business-lending activities
The NCUA published the Final Rule on Regulation 723 on March 14, 2016, significantly altering the regulatory approach to credit unions’ member business-lending activities. Most of the rule will be effective January 1, 2017, and will require planning and policy change by affected credit unions.
The near collapse of the taxi medallion market triggered by the emergence of new ride-sharing technology is a great opportunity to re-evaluate both the underlying lending issues that may be intensifying the unfolding disaster and the five principles of sound commercial lending.
Last month I had the pleasure of attending the SBA North Florida Small Business Week awards ceremony in Jacksonville. It was great to see many of our clients at the ceremony, several were honored…
I received a fantastic post from Guy Messick this morning and hope everyone in our industry takes a moment to read and reflect on the message. Well done Guy!
“It is time that we remember who we are as credit unions and what we stand for. It is time to revisit our core principles and value and advocate how credit unions have made America and Americans financially stronger. It is time to stop apologizing for our desire to grow credit unions and give more people the opportunity to join credit unions.”
The gods were smiling on us during our stay in Charleston. Fantastic weather, an idyllic setting and engaged attendees provided a perfect recipe for our best-ever MBS Summit. I took a picture after leaving our pub crawl at the Blind Tiger Pub, and I think it sums up the whole event.