CLEARWATER, Fla. — Credit unions should not stress over adding or increasing fees when they compare their pricing to that of banks.
Bill Lehman, VP of portfolio consulting for CSCU, said the first thing CUs need to do to boost non-interest income is to pull out their own fee schedule.
"Take that fee schedule and compare it to the rest of the industry, right down to NSF fees, car loan late payment fees, and charges for issuing new plastic."
Lehman's opinion is there is a huge gap between what most credit unions are charging for fees versus what most banks are charging, and CUs can narrow that gap while not upsetting members. "We can still remain very competitive on fees and at the same time make a little more money," Lehman added. "And by comparing fee pricing we can see where opportunities are."
One of the toughest things for the CEO to do, acknowledged Lehman, is to approach the board and discuss hiking fees. However, if the credit union takes the same approach presenting its case to the board as it took in analyzing its fees-side-by-side comparison-Lehman believes many more boards will pay attention and approve the increases. "I know it's a big hurdle getting the board to approve a fee increase."
Lehman also urged credit unions not to take a wait-and-see approach with debit interchange before adjusting pricing to make up for potential hits to revenue. Regardless of what happens in the debate over debit interchange, Lehman contended that interchange revenue will continue to be attacked by the Fed and the Consumer Financial Protection Bureau.
