20 on '20: Credit union chief expects economy to be flat this year
Photo / Jim Neuger
David Libby, president and CEO of Town & Country Federal Credit Union
David Libby, president and CEO of Town & Country Federal Credit Union, is wary of the high level of consumer debt and what impact that may have on the economy this year.
Outstanding credit card debt is expected to top $1 trillion this year.
“As we enter 2020, I anticipate that card debt will slow consumer purchases. Credit card debt outstanding has continued to rise, and shows no sign of dissipating this year,” Libby tells Mainebiz. “In Maine, rising incomes with continued low unemployment may give some relief in this area.”
Town & Country FCU, which is based in Scarborough, has six offices, 120 employees and $385 million in assets.
With the Federal Reserve Bank indicating it will hold off on any further reductions in the prime lending rate, Libby sees the economy flattening out.
“With the Fed indicating that no further rate reductions are planned at this time, that is likely a signal that there will be a wait and see approach with the economy in more of a holding pattern than in previous years,” he says. “Overall, we expect economic activity to be relatively flat.”
He expects auto sales to be among the sectors affected, which will have an impact on lenders and dealers, as well as state and local tax revenue.
“With years of very strong U.S. auto sales, most consumers have upgraded vehicles as needed due to holding onto late model vehicles during the prior economic downturn,” he says.
Bright spots in the economy
Libby expects the housing market to remain strong, at least in southern Maine.
“With the southern Maine housing market remaining very tight, real estate lending, especially in Cumberland and York counties, shows little sign of slowing. We expect the strong home mortgage refi market to continue due to low interest rate environment. This low rate market also allows new and first-time buyers to enter home buying market,” Libby says.
He said the lack of existing homes is creating demand for loans for new homes and even owner-occupied multi-unit properties. Both, he says, are reactions to the tight housing market, “as buyers look for options to help offset the high cost of real estate in communities across the region.”
As for Town & Country FCU itself, Libby says, when it comes to possible expansion, it remains open to opportunities.
“We are continuing to examine our current and future branch/store network to understand future consumers so always looking at opportunities to meet those needs,” he says.
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