Search
 

Credit Unions Turn to Minimum Balance, Monthly Fees to Counterbalance Margin Compression

ARLINGTON, Va. - Credit unions have relied on minimum balances and monthly fees to control share draft account expenses over the last couple years while earnings have been tight. NAFCU's July Flash Report survey discovered that 39% of respondents used minimum balances on share draft accounts to help control expense,...

By Sarah Snell Cooke | Updated on August 03, 2004

ARLINGTON, Va. – Credit unions have relied on minimum balances and monthly fees to control share draft account expenses over the last couple years while earnings have been tight. NAFCU’s July Flash Report survey discovered that 39% of respondents used minimum balances on share draft accounts to help control expense, while another 35% indicated they charge monthly fees. Less popular methods of balancing expenses included overdraft protection (10%), not paying dividends (8%) and other (8%), which basically includes foreign ATM and debit interchange fees. The bulk of those surveyed (80%) said they use a “chart of expense accounts” to monitor expenses. To gauge their expense control, 54% said they use an expense over assets ratio. Another 40% said they employ their expense over net income ratio. Six percent responded “other,” which includes watching the change in their budget. Office operations have been the primary target of expense controls, 55% of Flash respondents said. Other places where credit unions have taken aim include compensation and benefits (24%), travel/conferences (9%), all expenses (7%), loan servicing (3%), and education/training (2%). Nearly all of those surveyed (94%) said their credit union’s board reviews the credit union’s expenses every month while the rest said the board monitored expenses quarterly. Twenty-nine percent said they had established a credit union service organization to reduce the costs of products and services. “It appears that credit unions are doing a good job of controlling their expenses during the recent period of margin compression,” NAFCU’s Flash Report read. “Further they have done so while still competitively providing their members with the financial products and services they desire.” [email protected]

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2024 ALM Global, LLC. All Rights Reserved.