Newsroom
NAFCU holds annual Fed meeting
The NAFCU Board of Directors and senior association staff today met directly with Federal Reserve Governor Michelle Bowman and senior Fed staff to discuss important credit union issues and share NAFCU’s Annual Report on Credit Unions.
During the meeting, NAFCU highlighted the important role credit unions play in providing financial services, especially to low-to-moderate income households. The association noted that credit unions have seen cross pressures in earnings, with net interest margins improving from a year ago, but offsetting increases in provision for loan and lease loss and continuing declines in fee income. Meanwhile, liquidity and interest rate risk remain top concerns for the industry.
Threats to interchange remain a big concern for credit unions. NAFCU stressed the importance of ensuring that credit unions can effectively earn non-interest income to provide low-cost financial services. NAFCU and the Fed talked over the central bank’s proposal to further adjust interchange rates, which the association strongly opposes.
NAFCU also mentioned its support for FedNow, which launched in July, while noting that credit unions continue to invest in other fast, secure, and convenient payment options for their members. However, the association expressed concerns around fraud trends, such as insecure payment networks and peer-to-peer fraud. NAFCU also urged the Fed to halt any plan to offer a retail central bank digital currency (CBDC), which would constitute a radical expansion of the Federal Reserve’s mission and involvement in the economy.
NAFCU will continue to engage the Fed and keep working to protect credit unions’ non-interest income.