The Biggest Risk No One Is Talking About - FOR CREDIT UNIONS

On Demand Webinar (September 21, 2021)

Eric Poulin

Account Manager

Darling Consulting Group

Eric is an Account Manager at Darling Consulting Group where he assists financial institution executive teams to bolster their asset liability management (ALM) process. In this role, he provides comprehensive solutions in various areas such as interest rate risk, liquidity risk management, and capital. Additionally, Eric is well-versed in the areas of deposit strategies, regulatory support, and executive-level education.


Eric began his career at DCG in 2014 as a financial analyst and has also worked closely with the implementation, development, and education of DCG’s decision-support tools (Deposits360°® and Prepayments360°™). He currently lives in the Seacoast area of NH with his wife and is a graduate of the University of New Hampshire with a degree in economics.

Joe Kennerson

Managing Director

Darling Consulting Group

Joe is a Managing Director at Darling Consulting Group. In this capacity, he works directly with financial institutions by providing solutions for their asset liability management process in the areas of interest rate risk, liquidity risk management, ALM modeling, regulatory compliance and executive-level education. He is a frequent speaker and author and directly advises clients in all aspects of ALM.

The biggest risk for credit unions may not be what you think. It may not be earnings pressure, nor interest rate or liquidity risk, and not even credit risk. So, then what could it possibly be? It’s regulatory risk – specifically, the NEV Supervisory Test and mortgage-related concentration risk.


Furthermore, these risks may not even be on many credit unions’ radars. The Supervisory Test results are low or moderate risk for most credit unions today. However, a sell-off in the bond market and/or tightening by the Fed will elevate those risk levels swiftly for two reasons: increased asset duration and lower net worth ratios.


As for the mortgage-related asset concentration risk, we have seen a substantial increase of examiner comments on increased concentrations – a signal that regulators are shifting their focus to the higher levels of mortgage-related assets on balance sheets today.


These regulatory risks will only increase as credit unions look to head off potential margin pressure in 2022 by putting cash to work in mortgages or the bond portfolio. Substantiate your risk position today so your strategies are not put on hold from a difficult exam.


Join us on this webinar to understand the hidden regulatory risks and how you can be proactive with your risk management analysis and narrative. Highlights of the webinar will include:


  • Understanding how and why cash extension may actually reduce risk today

  • Risk management ideas for a proactive ALCO process

  • Everything you need to know about the NEV Supervisory Test – and its impending risk

  • A risk management pathway to defend concentration risk

  • Case studies with positive responses to recent regulatory comments