Third Quarter Brings No Major Change to Non-Interest Income

The full effect of Regulation E on credit unions is yet to be determined.


A third quarter 2010 trend article published on noted the slowing growth in fee income for FirstLook credit unions.

“The new opt in rules for debit overdrafts did not reduce that income but in fact is increasing the number of members who use [it],” commented Henry Wirz, CEO at SAFE Credit Union.

Perhaps not surprisingly, then, fee income recognized in the third quarter of 2010 declined 0.75% from the previous third quarter, but year-to-date fee income is up 1.4% from the first nine months of 2009.

The graph below shows the 90th percentile, the median (50th percentile), and the 10th percentile for FirstLook credit unions with more than $10 million in assets.* For this group of approximately 4,400 credit unions, growth in the 90th percentile has declined over time.

 12-Month Growth of Fee Income

Over the past 12 months fee income growth for the 90th percentile is 23.4%, which is a significant decline over the 32.2% ranking posted by the same credit unions in March of 2010. However, during the same comparison period fewer credit unions experienced a large decline in fee income. The 10th percentile ranking moved from an 18.8% decline to a 17.2% decline in September.

Regulation E changes took effect for existing customers in the middle of the third quarter, so we’ll keep an eye on non-interest income trends in the upcoming quarters.

*The small dollar changes from credit unions with asset sizes of less than $10 million result in large percentage changes, which can skew a percentile ranking analysis.