CUNA's Schenk refutes banks' complaints re: CUs as 'plain hogwash'
MADISON, Wis. (4/9/15)--Common narratives from the banking industry about credit unions fall "woefully short of facts," writes Mike Schenk, CUNA vice president of economics and statistics, in this month's Credit Union Magazine. In the article, Schenk counters claims that credit unions harm community banks, calling it "plain hogwash."
"In 1992, the largest 100 banking institutions controlled 41% of financial institution assets and smaller banking institutions controlled 53% of the total. Today, the largest 100 banks control 74% and smaller institutions control 19%," Schenk wrote. "If small banks are being harmed, the source of that harm clearly is big banks, not credit unions."
Schenk adds that, as the country's only member-owned, democratically controlled financial institutions, credit unions are a necessary and "extremely popular" financial alternative.
He points out that credit unions:
Delivered more than $7 billion in direct financial benefits to consumers in 2014 through lower interest rates, higher yields on savings accounts and fewer and lower fees;
Do not shy away from serving members where needed. Approximately 49% of credit union branches are located in Community Development Financial Institution investment areas, compared with 42% of bank branches;
Serve tax-paying Americans. Credit union members paid an estimated $1.2 trillion in taxes in 2014; and
- Encourage local ownership and control by the nature of their tax status.