An article in the April 7 edition of the Wisconsin State Journal highlighted how state credit unions are growing rapidly--beyond the pace of their for profit-competitors.
While the banks aren’t happy, credit unions use their cooperative structure to better serve their members.
“We are focused on taking great care of our communities, serving our membership well,” said Jay Magulski, CEO of New Berlin-based Landmark CU.
Magulski’s credit union was among the credit unions cited for its success. Landmark CU recently topped $3 billion in assets, which makes it the third-largest financial institution in the state.
Landmark’s success is reflective of overall credit union growth. From 2011 through 2016, total assets at Wisconsin-based credit unions increased more than 43% compared with total assets at Wisconsin-based banks which increased just 12%, the Journal reported.
“Since 2012, at least two banks in Wisconsin and one in Minnesota have been purchased by credit unions and another such application is under review; more than half a dozen transactions have occurred during that period involving Wisconsin credit unions buying bank branches,” Journal reporter Judy Newman wrote.
But with combined assets of $31.5 billion, as of Dec. 31, Wisconsin credit unions have less than one-third the business of Wisconsin banks, whose combined assets totaled $108.9 billion.
Newman noted that banks and credit unions “have some clear differences.” While banks operate for the benefit of their investors, credit unions are cooperatively owned and return excess income to their members.
The ‘value we’re adding back to our members’ is a draw,” said Kim Sponem, CEO of Summit CU, Madison, Wis.
Like a lot of credit unions nationwide, Summit CU issues an annual dividend to its members. In 2016, members received a total of $1.9 million, with individual payments of up to $1,000.
“The more business you do with us, the more you’re going to get back,” Sponem told the Journal.
Their cooperative structure also means credit unions offer lower rates and fewer fees. For example, UW CU, Madison, Wis., does not charge its members for using ATMs, either its own or those owned by other financial institutions, and it does not charge fees for overdrafts on debit cards.
“We saved members $19 million in 2016 (on overdraft fees) compared to the banking industry average,” said Paul Kundert, UW CU president/CEO.