Credit Unions Facing More Than 6% Decline in Fee Income

Over the last few years, credit unions have significantly increased their reliance on fee income - four years ago non-interest income made up 10% of total revenue versus 15% in 2002. Recently, though, credit union fee income took a potential hit, as retailers and the two major credit card associations reached a settlement on interchange fees. The most immediate impact on the bottom line will come from a reduction in debit interchange fees. To better gauge the extent of this impact, Callahan & Associates has begun surveying credit unions on their sources of fee income.

 
 

Over the last few years, credit unions have significantly increased their reliance on fee income - four years ago non-interest income made up 10% of total revenue versus 15% in 2002. Recently, though, credit union fee income took a potential hit, as retailers and the two major credit card associations reached a settlement on interchange fees. The most immediate impact on the bottom line will come from a reduction in debit interchange fees. To better gauge the extent of this impact, Callahan & Associates has begun surveying credit unions on their sources of fee income.

The forty-seven credit unions that have responded thus far indicated that 17.6% of their fee income is generated via debit interchange fees. This is currently second only to NSF charges as a fee income generator, but this interchange income will surely decline.

 

 

 

May 19, 2003


Comments

 
 
 
  • very timely! with investment returns so low,fee income is now more importent than ever. Thank you
    Anonymous