What’s Fueling CU Growth? New CUNA Mutual Group Report Has Some Answers
While credit union membership continues to grow, the number of credit unions continues to drop.
CU membership continues to grow.Membership growth at credit unions is being fueled, in part, by an unlikely source—the Dodd-Frank Act– the CUNA Mutual Group said in its latest Credit Union Trends report.
Credit union membership rose a record 706,000 in August—or 0.6%–much better than the 477,000 new members added in August 2017. During the last year, credit unions added 5.02 million new members, the fastest growth in credit union history.
Membership growth is being fueled by strong job gains and a demand for credit.
However, CUNA Mutual Group’s report also stated that a controversial part of Dodd-Frank is driving people away from banks and to credit unions.
The Durbin Amendment capped the fees large banks can charge merchants to process debit card transactions. To make up for that lost revenue, banks are increasing monthly fees for having a debit card or checking account, CUNA Mutual Group said.
“The higher charges are driving many bank customers to their local low-or-no-fee, not-for-profit credit union,” the group said.
Ironically, credit unions have been outspoken in their opposition to the Durbin Amendment, which pits them against retailers, who favor it. House Financial Services Chairman Jeb Hensarling included a repeal in his Financial CHOICE Act last year, but dropped it, as supporters of the legislation said a fight over the repeal could have endangerd the bill on the House floor.
