Financial Charges Create Customers, Not Members

A large bank issued a press release last week attributing their record-level net income to higher service charges. This stands in stark contrast to how credit unions measure success.


Bank of America issued a press release on Jan.18 announcing their fourth quarter results and record 2004 net income of $14.1 billion. Part of this success was driven by non-interest income which hit $5.96 billion partially due to “record card income [and] higher service charges” according to the release. (Emphasis added).

This stands in stark contrast to how credit unions measure success. It would be a rare day that a credit union issued a press release touting its success by charging its members higher fees. That doesn’t mean credit unions are not in business to make money. It’s what credit unions do with their “profit” that makes the difference to members. The value proposition of credit union membership is clear: Their profit is recycled back to the members in the form of higher savings rates, lower loan rates and better member service.

In contrast, if the industry issued a press release on how we measure success, it might include the following credit unions that scored in the Top Five of their respective peer groups in Return of the Member (ROM) (see below for more information). Callahan's created the ROM Index for credit unions looking to measure their most important asset – their members' use of the credit union.

The Return of the Member calculation considers three core credit union functions of lending, savings and product usage. The ranking system is an index calculation that takes into account a credit union's performance in comparison with its asset peer group.

  • Return of the Savers measures how well a credit union is providing deposit services to its members.·
  • Return to the Borrowers recognizes that credit unions were created to provide credit to their members at a reasonable cost.
  • Member Service Usage measures how efficiently a credit union provides and promotes services to its members.



Jan. 24, 2005


  • We need more of this type data to present to our Congressmen as a comparison to the banking industry. Pat Wilson, SACU
  • Very interesting measurement. May utilize some of these concepts.