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| The Economy & BFSFCU |
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| Posted: Apr 17, 2008 |
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Following the close of the first quarter of 2008, global economic conditions remain uncertain in the wake of the bursting of the housing bubble. Mortgage default ratios, particularly among subprime borrowers, have reached record levels. The effects have spilled over into other financial sectors resulting in market volatility across the board, affecting many financial institutions to varying degrees.
In spite of these unwelcome economic trends, BFSFCU remains well-positioned to continue to serve our membership by providing a stable and convenient source of credit and a secure place to save for the staff and families of The World Bank Group and the International Monetary Fund. Following is a brief overview of the Credit Union’s standing in the current financial environment.
Subprime Mortgage Lending Policy
BFSFCU does not engage in subprime mortgage lending. All of the Credit Union’s real assets are backed by a strong base of member deposits and a conservative capital base. The Board of Directors and senior management conduct a monthly assessment of the progress of the Credit Union’s deposit and loan growth and make adjustments to pricing and investment strategy as dictated by changing market conditions.
Home Equity Lines of Credit (HELOCS)
In response to a softening housing market, and as home values have leveled off or in some cases fallen, several large mortgage lenders have recently indicated that they will place caps on the credit availability of their customers’ Home Equity Lines of Credit (HELOCs).
BFSFCU has no plans to reduce our members’ HELOC limits at any time in the foreseeable future. The housing market in the Washington, DC metropolitan area (where the majority of our real estate loans are concentrated) continues to remain stable relative to many other lending areas, and the Credit Union’s excellent financial condition, a testament to the quality of our membership, has helped to insulate us against additional risk despite rapidly changing housing market conditions.
Financial Soundness
Despite volatility in the financial and real estate markets, BFSFCU experienced steady growth in both loans and deposits throughout 2007. Based on our strong performance, the Board of Directors approved a record $15 Million supplemental dividend (representing an additional 80 basis points in dividends). For additional information on the Credit Union’s key financial metrics, refer to our Financial Highlights, which show the fiscal condition of BFSFCU at the close of 2007.
Our Commitment to You
BFSFCU is committed to providing exceptional products and services, designed specifically to meet the unique needs of our membership. We will continue to examine economic performance metrics and monitor the financial and real estate markets to ensure that our policies and practices provide the best possible benefit to our membership in every financial environment. |
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