Research by Michael Moebs, Economist & CEO of Moebs $ervices, found that credit unions are more reliant on service charges than other depository institutions.
According to Moebs, service charges on deposit accounts include transaction fees - money orders, check cashing, etc., maintenance fees, ATM fees, overdraft fees, and other overdraft related items.
According to Moebs' analysis, service charges as a percent of assets were 0.59 percent for credit union in 2017 versus 0.22 percent for banks and 0.09 percent for thrifts.
Moreover, Moebs found that service charges at credit unions represented 83.6 percent of total net income. In comparison, service charges as a percent of net income for banks and thrifts were significantly lower at 21.4 percent and 8.1 percent, respectively.
Michael Moebs said: "Strategies such as price and account design are essential to credit unions in determining what will generate the most service charge revenue, while staying consumer friendly."
If it wasn't for the damn FEE INCOME many of these credit unions would be in a red rectal bleed out of negative income. Subtract the FEE INCOME from the bottom line and many of these credit unions turn negative.
ReplyDeleteFee income is vital to all financial institutions, not just credit unions. It's simply a revenue source that is usage based. It's possible to avoid most fees as well. It's really an equitable way of generating income.
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