Recent regulatory changes, combined with ongoing economic factors, are taking a toll on financial institutions’ income statements. Noninterest income has decreased due to the impact of Regulation E on overdraft income, and a further reduction of noninterest income is expected due to the looming effect of the Durbin Amendment on interchange income. In fact, according to an October 2010 webinar report from the Independent Community Bankers of America, more than 80 percent of financial institutions expect Regulation E to impact their overdraft revenue by 5 to 20 percent.download pdf
Non-interest income comprises approximately 34 percent of bank income¹ and almost 27 percent of credit union income.² The problem is fees — the major source of non-interest income — are...
Fees are now — and will continue to be — a major revenue driver for financial institutions. How well you manage them and disclose them will determine whether you remain compliant with the CFPB and avoid hefty fines and other punitive actions.
To remain competitive, traditional lenders may need to consider criterion similar to Fintech applications where FICO scores weigh less into decision making such as: income, length of employment and payment history.