TACOMA, Wash. – The squeeze on margins is giving credit unions new momentum to raise non-interest income in heretofore unorthodox methods ranging from imposing fees on debit card transactions to charges on below-balance checking, according to a Kansas City CU consultant. Addressing a session on "Non-Interest Income's Coolest 100 CUs" at the annual meeting of the Washington Credit Union League, Rory Rowland, owner of his own Independence, Mo. firm, said declining spreads are forcing CU managers to rethink attitudes on finding new avenues of income "for their own survival." Rowland, a frequent speaker on the trade group circuit, said one of his clients has started a 10-cents per debit transaction fee with no resistance and he listed Space Coast CU in Melbourne, Fla. as being unafraid to hit balances with a $5 fee when balances drop below $500 for non-interest accounts and $7 on balances below $700 for interest accounts. In a rundown of current innovations to build members and income, Rowland said one Pennsylvania CU uses the "one click" loan application on the front page of its Web site witnessing a 70% jump in applications two months after making a change. Too many Web sites, said Rowland, make it difficult for members to navigate and thus the CU misses out on loan business. Rowland also estimates 50-60% of CUs are now offering "courtesy checking" services which impose fees when accounts go negative but bar return checks to vendors "saving embarrassment to members." "Some of those $50-$65 fees that vendors charge members for returned checks are avoided," said Rowland with CUs earning goodwill from their members. On relationship pricing, Space Coast, for one, has seen its ROA climb from 1.1 to 2.0 by halting the pursuit of unprofitable accounts, said Rowland. Urging greater use of MCIF in relationship pricing, the Kansas City consultant plugged Marquis Software Solutions, as a Texas firm which is helping CUs identify those unprofitable members "right on the balance sheet." Trustar CU in St. Paul, Minn. is one CU that is altering or dropping discounts on other products in exchange for loan business, said Rowland. "They don't need to give that extra half a percent off for a checking account," he said. In summarizing trends, Rowland said CUs are finding "a changing mindset on fees." In other words, there is a push back on attitudes that CUs will not charge bank-like fees. The attitude is now that CUs will charge modest fees but simply "stay below" bank rates, concluded Rowland. [email protected]