When reviewing fee income strategies, credit unions need to ask how changes will affect member behaviors and look at the value equation.

John Lass, senior vice president, strategy and business development at CUNA Mutual Group, shared that suggestion Tuesday at the company's Online Discovery conference during a session on fee income.

Lass said with the long-term trend of pressure on spread income and the expectation it will continue, fee income has become significantly critical to credit unions.

It should also now be viewed as an efficient and controllable way to achieve bottom-line results, he added. When reviewing fee income strategies, credit unions need to ask how changes will affect member behaviors and look at the value equation.

“Member value equals benefits, minus price. A benefit is something that is both qualitative and quantitative. It's important to remember two members may have completely different perceptions of the value a product brings,” Lass said.

Fee income comprises 20% to 30% of a typical credit union's revenue and for many of them, that figure has nearly doubled since 2000, Lass noted, adding that in 2010, the credit union system generated $13 billion in fee and other operating income.

Lass recommended several factors to consider when evaluating a change in fees, including a member's cost to switch PFIs, the value of the product to a member and the alignment with the credit union's brand positioning.

Other considerations are reviewing the availability of alternatives, potential changes in regulations, reaction from competitors and the credit union's cost of providing a service, he added.

The Online Discovery conference is a free, virtual event that has attracted a national and international audience of more than 1,800 credit union and league staff, according to CUNA Mutual.