From 2006 through 2007, for the first time in U.S. history, credit unions experienced average net interest margins on loans running below operating expenses. In 2008, a poll of over 100 credit unions found their top concern was decreasing profit margins, partially due to their tendency to asymmetrically lower loan rates more rapidly than raise them in response to market changes.

Central to the recent difficulties experienced by credit unions is their inability to use a professional, noninterest pricing strategy to compensate for the ongoing decline in interest margins. Although credit unions often offer superior financial security–a key customer decision criterion in today’s turbulent times–they still overlook opportunities to professionally manage their noninterest income.

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