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RENO, Nev. – Credit unions shouldn’t be so quick to shed their credit card portfolios. Even if the portfolios are “stagnant”- not turning a profit -they do cement member ties, and one result of selling is opening up the member base to competitors. That was one of the messages shared by participants at a panel on fee generation at CUNA’s Future Forum conference here. “Why would anyone risk opening your membership to Bank One,” declared one Midwest participant adding “this is like opening a big can of worms.” The CUNA panel, entitled “To Fee or Not to Fee” heard other advice from the moderator, Janet Randall, assistant vice president at CUNA Mutual Group, who suggested CUs look at both checking and mortgages as sources for fee income. On the checking side, examples include fees one-checks, debit cards, non-member check cashing, ATMs and payroll cards. “Mortgage and home equity loans are the most efficient ways for members to borrow, and the most powerful method of developing primary status with a member,” said Randall. “Surveys show that 70% of members with a mortgage or home equity loan at their credit union identify it as their primary financial institution.” Randall said “those loans deepen the member relationship.” She also stressed the use of debt cancellation services as a growing source of fee income in the light of delinquencies due to corporate layoffs, divorce, or illness, three of the biggest contributors to delinquencies. Net interest income will continue to drop in the coming months, predicted Randall, and it’s already lower than past decades. In 2001 net interest income averaged $3.58 for every $100 of assets, the lowest in credit union history. “To put this in perspective, in the 1960s and 1970s, credit unions earned well over $5 for every $100 in assets. This number may decline even further as interest rates move up, putting more pressure on credit unions to rely on non-interest income,” Randall added -

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