Servicing Accounts for Big Chunk of Fee Income.(new non-interest revenue now added to call reports)(Brief Article)(Statistical Data Included)

A report released by the FDIC says that new detail from bank call reports sheds light on their loan servicing income and other sources of fee income.

For nearly 25 years, non-interest income has been growing as a share of banks' operating revenue. And in 2001, the FDIC added new non-interest revenue data to the call reports that banks must file with the agency.

The data outlines the new categories of non-interest revenue and analyzes what these data show about the prevalence and relative importance of different products and services among the more than 8,000 commercial banks that are insured by the FDIC. Traditionally, the FDIC only asked about fee income from fiduciary activities, deposit accounts and trading revenues. Everything else was counted as "other" fee income.

In 2001, fee income accounted for over 40% of bank revenue, up from less than 20% in the late 1970s.

Servicing fees accounted for 7.4% of bank non-interest income in 2001, according to the FDIC. Banks reported receiving $11.6 million in loan servicing non-interest income. The FDIC data includes fees for servicing real estate loans, credit card loans and other assets, but does not break out how much of the servicing fee can be attributed to each loan type, an FDIC spokesperson said.

Also, the call report data does not direct banks on whether excess servicing should be counted as fee income, but the spokesperson said that in the absence of explicit instructions not to, the FDIC believes it is likely that excess servicing is being included in servicing fee income.