Credit union lending faces pivotal changes in 2026 as interest rates, inflation, and regulatory shifts reshape the landscape. In this episode of Credit Union Conversations, host Mark Ritter and MBFS COO Jeff Lyons make bold predictions about fed rate movements, treasury rates, and commercial lending growth. They discuss how rising delinquency rates may affect the industry and explore the NCUA's anticipated regulatory priorities, including oversight of AI and automation. From mortgage rates to commercial real estate refinancing opportunities, this Quick Hits episode delivers actionable insights for credit union leaders navigating an uncertain economic environment in the year ahead.

What You Will Learn In This Episode:

✅ How fed rate reductions and treasury rates will influence credit union loan pricing strategies and member borrowing costs throughout 2026

✅ Why commercial lending growth may slow, while commercial real estate refinancing opportunities emerge from distressed properties

✅ What regulatory priorities the NCUA will focus on, including delinquency management, loan loss reserves, stablecoins, and AI and automation policies

✅ How the housing market, unemployment rate, and inflation rate interconnect to shape the overall economic outlook for credit unions

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TIMESTAMPS:

00:00 2026 predictions episode discussing credit union industry forecasts and Fed rate and interest rates predictions, with expectations of rates dropping to 3-3.25%

01:42 Treasury rates and mortgage rates outlook, analyzing the impact on credit union lending and the housing market

03:10 Inflation rate forecast at 2.5% with discussion of tariffs and unemployment rate effects on economic stability

04:25 Commercial lending growth predictions and commercial real estate refinancing opportunities amid rising delinquency trends

06:29 Discussion of the NCUA board, the rising delinquency numbers, and the abuse of AI

10:15 Let’s talk football

KEY TAKEAWAYS:

✅ Federal Reserve leadership changes will drive fed rate policy toward 3% by year-end, creating refinancing opportunities for loans originated in 2024 at higher rates

✅ Rising delinquency rates will trigger stricter NCUA oversight on loan loss reserves and accounting practices, while AI and automation regulation emerges as a new compliance focus area

✅ Commercial real estate distress will create a "greater fool" refinancing market where credit unions can acquire loans at significant discounts after original lenders absorb losses

ABOUT THE GUEST:

Jeff Lyons - LinkedIn

RESOURCES MENTIONED:

Mark Ritter - Website

Mark Ritter - LinkedIn

SEO KEYWORDS:

Credit Union Conversations, Mark Ritter, MBFS, Credit Unions, CUSO, Credit Union Lending, Interest Rates, Inflation, Fed Rate, Treasury Rates, Commercial Lending, Delinquency, NCUA, AI And Automation, Mortgage Rates, Commercial Real Estate, Federal Reserve

[00:00:16] Jeff Lyons: here. I'm ready to go with our predictions.

[00:00:34] So, Jeff, let's roll into it. Sure. Currently everybody talks interest rates we're a little bit high fed rate, currently 3.75. We had an interest rate reduction in January or December, 2025. What's December, 2026? Look.

[00:01:04] I think they're gonna try and push some things down. So I'm gonna say three to three and a quarter

[00:01:35] But then I get worried about the impact of the politics taking over a little bit too much. Yep. Now treasury rates. Have completely gone away from the marketplace of fed rates, and the current treasury rate is 4.18. It is staying high. It is up there and many of our credit union [00:02:00] partners. Look at the treasury rates when pricing loans.

[00:02:07] Jeff Lyons: Well, you know the treasury, that's a key marker, right? It runs the mortgages. A lot of people set their rates off of it. I. I'm thinking just because of the other, the Fed fund rates dropping down, I'm gonna say 3 75.

[00:02:28] A little bit of modesty going down, and I think most of it will be tied to the employment rate, continuing to be a little bit softer, and we're gonna be getting back to what I call that historically neutral. Unemployment rate of 5%.

[00:02:56] So I see the housing kind of being flat the [00:03:00] way it's been, 'cause prices are just too high relative to income. So I think, I think mine's a better match. I'm gonna go there. 3 75.

[00:03:22] What will the inflation rate be? I've putting it at

[00:03:28] Mark Ritter: We are identical. I think there's just gonna be a little bit of natural decline, and I think it's gonna be because of soft demand. But it is going to be a slow slog back to 2%.

[00:03:49] Mark Ritter: the factor out there is a black swan event of some war, some natural disaster, something goes on.

[00:04:25] What is the marketplace like from a growth standpoint? Percentage in 2026?

[00:04:52] Mark Ritter: My money was on 10%. So we're very close. Interest rates we think are gonna soften a little [00:05:00] bit, not that much. Yeah, demand will be solid. However, this delinquency factor out there that continues to grow could be a mitigating factor. I think you may see some credit unions jump on board. It's always that greater fool theory of somebody financed this project for $20 million.

[00:05:43] Jeff Lyons: Yep. I could see that happening too.

[00:05:52] But unfortunately somebody's going to lose and it may be a refinance opportunity with somebody else.

[00:06:13] Mark Ritter: I think you could see that as well.

[00:06:26] Jeff Lyons: right? 'cause either you're gonna do it or someone else is gonna do it.

[00:06:37] My question for you is, are Harper and Otsuka reinstated. Yes or no or do we get back to three board members in 2026?

[00:07:02] So we get back to the three board members, but I'm gonna say between Harper and Otsuka, only one of them comes back. The other one goes on to other things.

[00:07:24] In a normal world, who knows what the Supreme Court's gonna rule. I have a hard time predicting those these days. So, but along those same line, what do you think the NC a's priorities will be? What will be some of their topics that they just jump on?

[00:07:48] I think they're gonna pay more attention to that in the coming year if it keeps rising. The other priority is going to be AI and the use or abuse of it in the credit union space. I [00:08:00] think they wanna do a little regulating on that.

[00:08:20] Stable coins in crypto is a near and dear subject to our current NCUA board member, so I think we'll see an emphasis on that. But also the use or abuse of AI and automation will be a top priority in terms of using it correctly and policies in that world

[00:08:50] Mark Ritter: Absolutely. Every once in a while we have conversations about rules and regulations and I always say, let's just wait till the next [00:09:00] election. November, 2026. The Senate seems pretty well locked in with Republicans. The house is razor thin. Do Republicans maintain control or the dems take control?

[00:09:44] If it's floundering, then I think the Dems get back in control.

[00:10:10] But I don't see how those 50 50 districts don't flip to the Dem side. All right. Most important piece. Who's gonna win the Super Bowl February 26th?

[00:10:31] Mark Ritter: just for the sadistic side of me and the controversy I could see this year being the Charger's year.

[00:10:51] Jeff Lyons: I've been looking at some mock drafting. They like to throw them out there and every one of them has the Broncos picking [00:11:00] last, so I'm like, maybe somebody knows something.

[00:11:08] Because he stunk there.

[00:11:13] Mark Ritter: Next up, near and dear to our heart, January 26th, who's the college playoff winner? The Georgia Bulldogs.

[00:11:35] Jeff Lyons: Yeah, and I think like an Ohio State being undefeated, you start to get that pressure. Right. So making that loss here, which didn't really hurt you that much.

[00:11:56] Mark Ritter: Not a bad selection. Well, Jeff, 12 months [00:12:00] from now we will find out how much we were off base.

[00:12:06] It's, it's been a