The recent trend of credit unions purchasing banks is something that advances the communities lawmakers’ constituents live, work, and thrive in, CUNA Chief Advocacy Officer Ryan Donovan says in a recent video on credit unions purchasing banks. While still relatively rare, Donovan notes credit unions buying banks is trending upwards and bankers are using those purchases to spread falsehoods about the credit union difference.
“Between 2004 and 2018, banks have closed over ten thousand branches, creating a net loss of 1,700 bank branches—as well as 86 new banking deserts—making it harder for U.S. consumers to access local financial institutions,” Donovan said. “With that in mind, it’s important that banks exiting the market have a wide range of options, including the option to sell to a credit union… Allowing credit unions to take on bank assets benefits everyone involved: the consumers and their communities, the bankers, and the credit union.
“Consumers benefit by gaining access to strong, responsible community-focused financial services,” he added.
CUNA’s analysis shows that credit unions provide more than $18.9 billion in direct and indirect consumer benefits per year.
“Nearly 90% of bankers indicated that they chose a credit union because they felt there was a greater likelihood that employees would be retained; more than 60% said a better cultural fit helped drive the decision,” Donovan said. “For about half, they saw the transaction as an opportunity to preserve their legacy of service to the community. A similar number indicated they felt that there was a greater likelihood that branches would remain open.”
Donovan called on credit unions to make sure they highlight the credit union story about how they help to preserve access to local financial service by partnering with banks ready to exit markets.
“Most of these transactions are being conducted by credit unions that are designated low-income credit unions. They’re keeping branches open, keeping the bank employees and working to retain the bank customers as credit union members,” he said. “This is a story that we need to tell policymakers because the human impact of credit unions purchasing bank assets will help them become more comfortable with what is still a small but growing trend in our sector.”