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While banker attacks, potential taxation, and other external, non-controllable issues do present serious challenges to the credit union system the more serious internal and controllable challenge is to diligently focus on EXPENSE control. As the NIM (net interest margin) decreases due to cost of funds and the need to remain competitive in the lending and investment arena, statistical data (see NCUA Letter #06-CU-15) indicates credit unions’ NIM, as of June 30, 2006, dropped another 5 basis points, while operating expenses increased by 5 basis points, a full 10 basis points swing. Yes, credit unions are partially offsetting the pressure on earnings with increased fees and other income streams, but this too presents another external challenge; concerns over non-related business income. A New Measure Is Needed

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