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7 Ways Credit Unions Miss the Mark on Noninterest Income

Credit unions often sabotage their noninterest income potential by undercutting the market or ignoring outside business models.

By Tina Orem | Updated on July 17, 2015

An uptick in lending may have credit unions thinking they can stop scavenging for more of the noninterest income that has helped so many of them survive a low interest rate environment. But a closer look at the data shows that noninterest income, which rose from 1.22% to 1.27% of average assets as of Q1 2015 versus Q1 2014, according to Callahan & Associates, is still critical for credit union survival.

During the first quarter of 2015, loan balances popped up 10.6% year over year to $731.2 billion, according to Callahan & Associates, and total income posted the highest growth (6.6%) of the last seven years. But loan growth is outpacing the growth in share balances, which rose 4.4% year over year, Callahan & Associates found, and because credit unions need shares to make loans, there’s a growing need to attract deposits.

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Tina Orem

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