The big squeeze on small credit unions | Comstock's magazine

 

Half of Credit Unions May Go Under

The credit union industry as a whole is booming. Last year it added a record 2.4 million members nationwide. Today, nearly 40 percent of American adults belong to a credit union.

But almost all those gains can be attributed to a smattering of the largest credit unions. While the 100 biggest credit unions represent only 1.4 percent of the industry, they contribute half of the asset growth and about 90 percent of its member growth, according to banking industry trade journal  The Financial Brand.

Meanwhile, the number of small credit unions, those with less than $100 million in assets, is shriveling over time. Every month, about 20 small credit unions are lost to mergers and closures. According to The Financial Brand forecasts, half of all credit unions will disappear by 2032 if trends  continue at current pace.

New Rules, More Demands

Credit unions and banks alike have complained about outsized costs associated with new regulations ushered in by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

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