Taxable assets decreased by $3.66 billion, to $263.65 billion, as consumers and institutions were lured by more attractive rates elsewhere in the money market.

LEAD: The assets of the nation's 466 money market mutual funds decreased by $1.13 billion, to $280.64 billion, in the week that ended Wednesday, the Investment Company Institute said yesterday.

LEAD: The assets of the nation's 469 money market mutual funds decreased by $955.0 million, to $365.04 billion, for the week ended Wednesday, the Investment Company Institute said yesterday.

Yields of tax-exempt funds were down for the week ended yesterday, as assets decreased by $262 million, to total $75.3 billion.

Total nonperforming assets decreased by $186 million, or 14 percent, from the first quarter to $1.1 billion, reducing its ratio of bad loans to total assets to 4 percent from 4.6 percent.