Why More and More People Are Choosing Credit Unions
Credit unions have added 13 million new members in the last five years. In 2011, after the financial crisis, about 600,000 Americans switched from big banks to credit unions or community banks on “Bank Transfer Day.” Some doubted the credit union growth would last – but they were wrong.
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“Most people initially thought the growth in credit union membership would be temporary, but credit unions hit a major milestone in 2015. For the first time in history, credit union member savings in the U.S. broke $1 trillion, according to CUNA Mutual Group, a major industry organization for credit unions,” wrote Chloe Della Costa for The Cheat Sheet in a 2015 article titled, “Why So Many Americans Are Choosing Credit Unions These Days.”
Consumers are drawn by the fact that credit unions boost the local economy and are locally owned and run organizations, according to Della Costa. The article also cites the lower fees, better returns, typically free checking accounts, not-for-profit model and the advantages to being a member and therefore an owner of the cooperative.
Growth has continued through 2016. According to a press release from the National Credit Union Administration from June, “credit unions have added 1 million members during the quarter and 13 million members during the last five years.”
Total assets held in federally insured credit unions totaled more than $1.2 trillion by this spring and deposits totaled nearly $1.1 trillion. Loans grew in every major category year over year, including auto loans and real estate loans.
As we are well aware of here at BECU (and deeply appreciative of), the Puget Sound region knows the advantages of credit unions. In fact, Seattle / Tacoma ranks first nationwide for conversion to credit unions.
“According to data from Nielsen Scarborough, a record 31.5 percent of people in the Seattle metropolitan area now use a credit union as their primary bank — up from 23.2 percent in 2008. Among the 50 largest metros, that ranks as the largest increase in credit-union banking,” wrote Gene Balk in The Seattle Times in April 2015. “In 2008, B of A and credit unions were nearly tied in the Seattle market. Now, more than twice the number of consumers use a credit union as their primary bank compared with the country's second-largest bank.”
Washington has 60 state-chartered credit unions. BECU is the largest, with nearly a million members and over $15 billion in assets.