After a strong 3rd Quarter, credit unions could see a drop in service income for the 4th Quarter. The source of this drop is still to be determined but some potential causes could be the settlement between retailers and Visa/MasterCard and also a reduction in real estate loan originations.
In the 3rd quarter of 2003, service income was a key component of credit unions' total income. Debit interchange fees remained strong because the Visa/Mastercard settlement only took effect in August. Furthermore, fees associated with the high volume of loan originations more than compensated for any drop that may have occurred. This explains why service income made up such a large part of total income last quarter.