Despite an improving economy and growing consumer confidence, there’s still turmoil in the financial world of millions of consumers. The American Consumer Council (ACC), a non-profit consumer education organization, calculates that nearly 32% of all consumer households remain “financially under-water” as a result of the 2008 Great Recession.
According to ACC’s president, Thomas Hinton, “Millions of consumers and American households are still paying the steep price for the irresponsible actions of those major banks and Wall Street investment firms that betrayed consumers and caused financial devastation during Great Recession. Its repercussions will be felt for another decade.”
And so, it should come as no surprise that millions of consumers have been drawn to credit unions during the past six years. CUNA announced that credit unions surpassed 100 million memberships nationally, according to data collected from credit unions in CUNA’s June 2014 “Monthly Credit Union Estimates.”
In the past 12 months (June 2013 to June 2014), credit union memberships expanded by 2.9%, compared to 2.5% in 2013 and 2.1% in 2012, according to CUNA data. Credit unions added a total of 2.85 million additional memberships over the past year – the largest reported increase in more than a quarter century. And, in percentage terms, the 2.9% increase was the fastest since 2000, according to the CUNA analysis. However, according to CUNA, there was some negative news. Some 54% of credit unions realized a decline in their membership numbers during the second quarter of 2014.
ACC’s Hinton, said, “This surge in credit union membership growth is just the tip of the iceberg, but it could be blunted if the NCUA fails to allow associations like ACC to continue to partner with credit unions.” Hinton noted that the NCUA has proposed new associational common bond policies that will hurt consumers by limiting their ability to join credit unions through associations like ACC.
Hinton said, “It makes no sense for the NCUA to create more regulatory barriers for consumers who desperately need and want the financial services offered by credit unions. There’s no question that credit unions have been a life-saver for millions of consumers as banks limit their consumer lending programs and focus their efforts on commercial business. Almost half of our new ACC members want to join credit unions, but the federal regulators are making it too difficult with their punitive policies and anti-consumer attitudes. It’s very frustrating.”
Hinton added, “When you consider that only 14% of the Millennial Generation (ages 14-28) belong to a credit union, there’s an entire generation that needs to know about the benefits of credit unions. But, if the NCUA makes it too difficult for Millennials to join credit unions, they’ll just go online and deposit their money in a big bank. The end result is credit unions will lose the overwhelming majority of the Millennial Generation to banks, and it will not serve the interest of young consumers in the long term.”
The American Consumer Council currently partners with over 45 credit unions across the nation to provide financial services and educational programs to its 148,000 members. ACC has asked the NCUA to continue to allow federally-chartered credit unions to add established national organizations as associational SEGs.