CARPINTERIA, Calif.–The arrival of a new year brings new hope, new plans and new forecasts—and those bring new challenges for any leader in attempting to digest all that. Don’t fret—CUToday.info is here to help.
Below readers will find a synopsis of some of our recent reporting around forecasts and other plans for 2022. Each item includes a link to the full story.
Another Billion Plastic Cards To Be In Circulation By 2022, Says Report
CARPINTERIA, Calif. – Spending for goods and services initiated by credit, debit, and prepaid cards issued in the United States, which totaled $6.616 trillion in 2017, will reach $9.313 trillion in 2022, according to statistics just released by The Nilson Report.
The Nilson Report noted at the end of 2017, there were 6.71 billion credit, debit, and prepaid cards in circulation in the U.S., and that within five years another 1.06 billion cards will be added, bringing the total to 7.77 billion at the end of 2022.
The full story can be found here
As CUs Prepare for 2022, Economist Forecasts Scenario Similar to That of 2021
ARLINGTON, Va.–For credit unions looking to 2022 and beyond, one economist believes it’s pretty safe to assume next year will be much like this year, although the new COVID variant may complicate things.
“We may see some steepening of the yield curve,” said NAFCU Chief Economist Curt Long. “This year has been a little disappointing in terms of where we started in that regard. I think we have been getting mostly positive economic data. As the Fed has successfully kept rates low on short end, there is some room for rates to move up on the long end.”
For credit unions doing their planning, Long expects the economy will continue to add jobs and to see the resulting growth. The only potential bump in the road, according to Long, would be a turn in the COVID pandemic.
“I expect 2022 to be a lot like 2021,” said Long. “Obviously, COVID is still presenting credit unions with a lot of uncertainty. Economically, things should be a little more stable unless we get a really strong bout from a new variant. I do not expect to see the kinds of broad shutdowns (seen during the initial wave of COVID).
The full story can be found here.
One Pandemic-Related Challenge to Fade in 2022
IRVINE, Calif.—While headwinds will persist, credit unions should expect a good year for the economy in 2022—and for one of their biggest pandemic-driven problems to fade.
Elliot Eisenberg, chief economist for economic consultancy GraphsandLaughs, shared that favorable news with credit unions during Origence’s latest Economic & Lending Trends webinar. He underscored that CUs’ bulging deposit base should begin to lighten as many finally see loan-to-share ratios improve, with mortgages playing a big role.
But Eisenberg also delivered words of caution to attendees as the country moves into a new year.
He warned that lenders should be wary of elevated used car prices—which are expected to remain high for quite some time—expect inflation to stabilize but hang around, and not to think the supply chain won’t need some time to work out its problems.
Eisenberg said the pandemic, even with the threat from the omicron variant, will continue to move into the rearview mirror.
“The pandemic phase of COVID is virtually over and we’re moving into an ‘end-demic phase,’” he said. “We're moving into a phase where people are less likely to change their behavior due to COVID.”
The full story can be found here.
CUES to Host New Talent Development Conference in 2022
MADISON, Wis.–CUES has announced a new Talent Development Conference to be held in 2022.
The organization has scheduled the event for May 15-17 in Austin.
“This first-of-its-kind event unites your CEO and chief HR, talent development, or people officer to create alignment around your credit union’s people strategy,” CUES said in announcing the meeting.
Additional details can be found here.
CO-OP to Again Host THINK Conference as Live Event in 2022
RANCHO CUCAMONGA, Calif.– CO-OP Financial Services announced it plans to resume its flagship THINK Conference as an in-person event in 2022.
After hosting virtual events during 2020-21 that attracted more than 5,000 attendees, CO-OP said it will host THINK 2022 from May 2-6 at the Sheraton Grand Hotel in Chicago.
Registration is now open here. A “Fall Special” rate of $1,299 will be available until Jan. 3, 2022.
“Going virtual maintained strategic momentum – and a much-needed sense of optimism – for the hundreds of leaders who regularly attend our annual THINK event,” said Samantha Paxson, chief experience officer for CO-OP. “Our virtual events introduced thousands of leaders to THINK for the first time. We’re excited that this year’s participants will experience THINK in its truest form – an in-person event that curates revolutionary thinking from around the world to ignite transformational change.”
Additional information can be found here.
Trellance Sees Positives for CUs During 2021, Offers Forecast for 2022
TAMPA, Fla.– Reflecting on what it called “another untraditional year,” business analytics fintech Trellance said the credit union industry is ending 2021 in a strong position.
Looking forward to 2022, Trellance Chief Product Officer Paolo Teotino said: “The extreme circumstances of the previous year were rejuvenating, in a sense,” said Teotino. “Credit unions met the quick and massive demands of digital change and many are maintaining the forward momentum with new capabilities that will position them for long-term success.”
Teotino believes that 2022 will see further acceleration of cloud adoption, and said Trellance is preparing with additional cloud-based solutions that will address emerging credit union pain points.
“In 2022, there is going to be a focus on alleviating any confusion or intimidation around the adoption of business analytics,” he said. “More credit unions understand that innovative data driven technology it is now key to keep them competitive and reinforce their member-centric focus.”
The full story can be found here.
Here’s What CU Direct Sees Ahead for Auto Lending & More in 2022
LAS VEGAS–The road ahead for auto lending in 2022 is looking pretty smooth, according to one person.
Phil Dupree, chief revenue officer with CU Direct and its sub-brand, Origence, said the company expects the record year it has seen for loans during 2021 to continue in 2022, and that many of its client credit unions are similarly optimistic even as the auto sales landscape continues to shake out from the pandemic.
One area that could see lending growth will be the ability to work directly with some of the largest auto retailers in the country in 2022, thanks to the passage of the new CUSO rule by NCUA. That rule does several things, but in particular it allows a CUSO to make an auto loan—which, along with personal loans, were the two types of loans CUSOs were previously prohibited from doing—directly to members. It’s an issue that has been a priority for CU Direct for some time, noted Dupree, who credited NCUA Board Member Rodney Hood for his efforts to get the rule passed.
The full story is here.
Rate of Inflation Expected to ‘Decelerate’ In Rest of Year, 2022, Says CUNA Economist
MADISON, Wis.–With credit union leaders worried over the ongoing pace of inflation, a CUNA economist is projecting the pace of price increases will continue to “decelerate.”
In his most recent CUNA Economic Update, Deputy Chief Advocacy Officer for Policy Analysis and Chief Economist Mike Schenk noted the year-over-year (YOY) inflation of 5.4% reached its second-highest level in the last 40 years, dating back to the “Great Inflation.”
Two similarities between the Great Inflation and today are high increases in wages and high increases in energy prices, largely due to market disruptions,” said Schenk.
Schenk said CUNA is projecting monthly price increases will continue to decelerate, closing out the year with a 5% annual inflation rate and a rate of 2.5% in 2022.
For the full story, go here.
CFPB ID’s 6 ‘Key Actions’ Planned for 2022, But In a Surprise, One is Missing
WASHINGTON–The Consumer Financial Protection Bureau (CFPB) has identified six regulatory activities for 2022 on which it plans to take “key” actions.
The CFPB said the list of matters the agency plans to pursue from through Oct. 31, 2022 “reflects the continuation of significant rulemakings that further our consumer financial protection mission and help to advance the country’s economic recovery from the financial crisis related to the COVID-19 pandemic.”
According to the Bureau, those six key actions include:
- Small Business Lending Data Collection
- Availability of electronic consumer financial account data
- Property Assessed Clean Energy (PACE) Financing
- Standards for Automated Valuation Models (AVMs)
- Facilitating transition away from LIBOR Index
- Reviewing existing regulations and market monitoring
Coming as something of a surprise is what’s not included on the list: plans for additional regulation/oversight of overdraft fees at credit unions and banks.
Saying many big banks are “hooked on fees,” the CFPB recently announced it planned to take action on overdrafts.
For the full details of the CFPB focus in 2022, go here.
Lending to Continue to Expand in 2022; Here’s What to Expect by Category, According to TransUnion Forecast
CHICAGO–Continued expansion of lending, including to non-prime consumers, is expected to occur in 2022 with origination levels reaching or surpassing pre-pandemic levels, according to the newly released TransUnion Financial Services 2022 Consumer Credit Forecast.
“For auto loans and personal loans, consumers who are generally higher risk are accounting for a growing share of origination volume, with the forecast providing insights that explain why such broader lending will benefit the overall consumer credit market,” TransUnion stated.
TransUnion is reporting its forecast found that the auto, credit card and personal loan markets are expected to continue expanding into the non-prime segment of the market (comprised of the subprime and near prime risk tiers) as financial institutions recalibrate their growth strategies.
This expansion is happening as serious delinquency rates remain well below pre-pandemic levels, TransUnion added.
“During the height of the pandemic, many lenders pulled back and tightened underwriting to hedge risk in a period of great uncertainty,” Charlie Wise, head of global research and consulting at TransUnion, said in a statement released as part of the analysis. “Consumer performance, however, has continued to stay strong, which has restored lender confidence. The economy is normalizing and continues to expand, and those signs of renewed strength are encouraging lenders to not just focus on the least risky consumers, but to provide greater access to those persons that may be viewed as higher credit risks.”
The full Transunion forecast can be found here.
The Fannie Mae Forecast for 2022, Including Rates
WASHINGTON—The outlook for full-year 2021 economic growth has been revised upward to 5.5%, an improvement of 0.7% points compared to last month’s projection, due primarily to stronger-than-anticipated consumer spending and inventory investment data, according to the December 2021 commentary from the Fannie Mae Economic and Strategic Research (ESR) Group.
The ESR Group also adjusted downward its forecast for 2022 real gross domestic product (GDP) growth to 3.2%, noting that strong recent data likely reflects a pull-forward of activity from the first half of 2022 and is unlikely to be sustained.
The principal macroeconomic concern for 2022 remains accelerating inflation and how the market and policymakers respond to it. While there’s significant room for uncertainty regarding the near-term path of inflation, the ESR Group projects it to peak at approximately 7.0% annualized in the first quarter of 2022 before gradually decelerating to 3.8% by year-end.
For the full story, go here.
CO-OP Launches Its Solutions & Technology Roadmap for 2022; Announces Pending Product Launches
RANCHO CUCAMONGA, California – CO-OP Financial Services has launched its solutions and technology roadmap for 2022, which it said addresses the “fast-changing consumer preferences for digital technologies that accelerated in the wake of the pandemic.”
According to CO-OP, the roadmap keys on the “need for credit unions to develop active, primary financial relationships with members who are increasingly meeting their own needs with fragmented financial affiliations.”
“Credit union members are more empowered than ever, curating their own suite of solutions from multiple providers to meet their everyday financial needs, directly from their devices,” said Bruce Dragt, chief product officer for CO-OP. “The pandemic accelerated that comfort and scaled digital fintech usage across demographics and use cases at a speed we’ve never seen. Now is the time for credit unions to rethink their value proposition, leaning into the humanity of financial services while leveraging technology to meet members right where they are across the day-to-day moments that solidify primary financial relationships.”
New Services in 2022
CO-OP announced that in 2022 it will introduce services that include a new Fraud Management Solution to help credit unions detect and mitigate fraud.
For CO-OP’s full 2022 roadmap, go here.