Overdraft Fees Weigh On Members In The Second Quarter

The 5300 Call Report breaks non-interest income into two major categories — fee income and other operating income. These broad categories are composed of many separate, important subcategories that, in many ways, can be more enlightening than the overall category totals. Tracking non-interest income subcategories, for example, allows credit unions to better monitor income streams, evaluate how revenue has changed over time, compare results against peers, and develop new, informed strategies to improve overall performance.

Callahan & Associates sponsors a non-interest income study to gauge the state of non-interest income among credit unions. Read the results below and learn how you can participate today.

• For all credit unions, total fee income increased 1.0% year-over-year, whereas total non-interest income increased 3.7%. For credit unions that participated in the Callahan study, that growth was 6.2% and 18.2%, respectively.
• Non-sufficient funds (NSF) and overdraft fees accounted for 47.7% of total fees collected year-to-date in 2023 for credit unions that participated in the Callahan study. On average, each member paid $9.10 in NSF and overdraft fees in the second quarter, a slight increase from one year ago.
• In the second quarter, credit unions in the Callahan study collected $14.30 in NSF and overdraft fees per share draft account. Participating credit unions in the Eastern region collected $9.30 per account, compared with $16.00 for Western region cooperatives.
• Increased inflation pushes members to tighten budgets and draw down savings balances to pay for rising expenses, such as food and gas. Consequently, NSF and overdraft fee income also increases — but at the expense of the member.