Enhance Credit Union Stability: A Comprehensive Guide to Optimizing Net Worth Ratio
A Healthy Net Worth Ratio: Financial Stability for Credit Unions The net worth ratio is a financial health indicator that measures a credit union’s ability to withstand losses and ensure financial stability. Importance A high net worth ratio is crucial for credit unions as it: Protects against financial losses and ensures continuity of operations Enhances resilience during economic downturns Builds confidence among members and regulators Attracts additional capital and investment Optimal Net Worth Ratio Levels A net worth ratio of 7% or higher is considered well-capitalized by the National Credit Union Administration (NCUA)....