ST. PETERSBURG, Fla.-Efforts to streamline checking and develop both credit and debit portfolios are essential for CU growth in 2013, according to PSCU.

There is big room for growth in debit and credit, simply because consumer usage of both products is increasing and because many credit unions could be doing more to leverage this business, said Chris Joy, director of strategic consulting for Advisors Plus, a part of PSCU. "In a large majority of credit unions we see underdeveloped credit and debit portfolios compared to the rest of the financial industry,"

Turning to credit cards, Joy said CU sales volume, credit limits, and sometimes balances per account suggest credit unions need to more actively manage credit lines and invest in more marketing. "Credit unions have a great story to tell-95% offer a better credit card value than other financial institutions and they need to make members aware of this."

Providing Needed Support

Joy said CU members have demonstrated significant interest recently in using their CU credit card, noting that Fed data on revolving credit shows bank customers' usage here declining while CU member usage is up. Joy recommended that credit unions place a staff member in charge of the credit card program to make sure it receives the attention it needs.

"The employee should be part of the senior management team to make sure the program receives the budget dollars needed for growth."

Norm Patrick, director of strategic consulting for Advisors Plus, addressed the opportunity debit provides. But in light of shrinking revenue due to the Durbin rules, he encouraged CUs to more aggressively attend to the program. "Bottom line, we see debit account for 20% to 30% of non-interest income at most credit unions. That's a big chunk. The credit union has to have someone in charge of the program to get their arms around it, and the tighter the better."

Patrick emphasized the last point, casting doubt on the findings of the recent Federal Trade Commission report on the impact of new laws capping interchange fee revenues. He said PSCU has determined that CUs below the $10-billion threshold have lost two to ten basis points since the Durbin rules became effective.

"People sometimes seem to forget that two basis points is a big deal. A typical credit union will see a half billion dollars in debit sales volume annually. Take away one basis point and that's $50,000. Now multiply by two or ten basis points, and there is your impact."

Patrick stressed maximizing penetration and usage of debit, reminding that instant issuance gets the card in members' hands as soon as they sign up.

Lastly, Patrick advised that credit unions grow and protect their checking businesses by streamlining the product. "Many credit unions need a clear, concise checking line. Credit unions tend to have too many offerings here. They need to have two to three at best."

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