WASHINGTON – A dramatic increase in liquidity and fallout from the Federal Reserve's interest rate cuts saw credit unions experiencing higher than normal numbers in short-term investments, according to the just-released Callahan & Associates 2002 Credit Union Directory. Figures for the year ending June 30 show a "dramatic" increase in liquidity with the proportion of funds held in instruments under one year, according to the directory's data. Almost 64% of investments in the industry were under one year, about 10% higher than normal. "The central investment issue is whether to stay short and wait for investments to rebound or begin making selective investments that will entail ALM risk," said Chip Filson, Callahan's president. The corporate system reached an all time high in assets of $59.1 billion, with credit union investments in corporates increasing from a 26.35% share of total credit union investments in 2000 to over 35% in 2001, the directory revealed. While mutual fund investments continue to expand, agency securities, however, fell from 45.68% of the total in 2000 to 37.11% in 2001. The total amount of credit union investments now stands at $149.7 billion. Meanwhile, the strong surge in credit union share growth through June 30, shows every indication of continuing based on early reports of third quarter data and is expected to boost total credit union investments even higher than the 17.3% overall hike reached in the past 12 months, the report revealed. "Given the state of the economy, such numbers are incredible," Filson said. "This positions credit unions to be able to do remarkable things to help members like one credit union I know that is actively calling members to rewrite real estate loans to lower their payments." Callahan's preliminary data from the call reports of a sample of 118 credit unions with total assets of over $90 billion, show examples of high share growth at six leading credit unions ranging from 20.7% at Navy Federal Credit Union to 26.19% at The Golden One Credit Union Callahan's directory also includes snapshots of all 10,366 credit unions and an overview of the credit union system following the Sept. 11th terrorist attacks. – [email protected]