NASHVILLE – Declining non-interest income is at the top of mind for many credit union CEOs, according to a survey by Credit Union Journal of CEOs at NAFCU’s Annual Conference here. Also getting mention as looming concerns: threats to overdraft and credit card revenue.

Several CU leaders expressed concern with the CFPB’s attention on overdraft pricing, as well as the negative light the member service is being cast by recent lawsuits that allege unfair overdraft practices by banks and credit unions. But what has Scott Wilson’s full attention is the fact merchants in many states – thanks to the recent antitrust ruling against Visa and MasterCard – can add a credit card surcharge.

“If a large number of merchants begin applying a surcharge to credit card purchases, will the public balk at using the plastic?” asked the CEO of $450-million SeaComm FCU in Massena, N.Y.  “Will they say, ‘I won’t use credit,’ and start to pay more with cash, debit, or even checks? This is a major concern. Our cards’ interchange revenue has already been impacted by the Durbin Amendment.”

Issa Stephan, CEO of $200-million First Financial FCU in Wall, N.J., also wonders how the surcharge will affect credit unions. He believes the move is just another that lines merchants’ pockets. “Yes, our credit union is concerned about this surcharge. It’s the same sort of thing as Durbin. We are being exploited by the merchants, because we take all the [fraud] liability for the transaction. I don’t have a problem with this if they take the liability.”

Jim Johnson, CEO of $76-million Hopewell FCU, Heath, Ohio, is paying attention to what will happen to overdraft revenue from the CFPB’s new focus on the member service. “Whenever the government regulates fees, that is an issue. I don’t think we can get too nervous about this until we find out the CFPB’s goals.”

However, Lourdes Cortez, CEO of $225-million North Jersey FCU in Totowa, N.J., is not so sure financial institutions have a great deal of time – especially with already thin margins – to let grass grow under their feet and not develop alternative revenue solutions. The CFPB overdraft focus comes at a bad time, she pointed out. “What is really pressing us today is our net income. We are challenged because our margins are becoming narrower, and capital is becoming more of an issue. We can’t go out and build capital like a bank.”


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