Credit unions go above and beyond for those banks leave behind
Credit unions will never apologize for putting people over profit. For-profit financial institutions are responsible to their shareholders, our industry is committed to—and responsible for—Americans reaching financial freedom.
The Community Reinvestment Act (CRA) was created to protect minority and low-income communities from the damage done by redlining and other discriminatory practices from banks.
Credit unions’ mission and structure already accomplishes what the CRA is designed to achieve: get financial services to those banks have left behind.
Applying CRA requirements to credit unions—and their limited fields of membership—means shifting resources away from members and communities.
The positive impact credit unions provide to their 140 million member-owners is undeniable, despite claims to the contrary.
Credit unions delivered more than $25 billion in benefits for their members in 2022 alone because they value their members – who are the heart and strength of communities – over profits. Credit unions’ competitive presence in the marketplace led to $4 billion in savings for non-members.
During financial crises, banks pull back on lending while credit unions go further to meet needs and serve consumers.
Credit union lending increased at roughly double the rate of bank lending during the COVID pandemic: From 2020-2021, credit union loans increased 13.5% (a 6.5% annual average increase), while bank loans increased 6.9% (a 3.4% annual average). These large differences were obvious even though the federal government disproportionately favored large banks in pandemic lending programs, such as the Paycheck Protection Program.
Since 2020, banks have closed a net of more than 8,600 branches, many of which were in underserved rural and urban communities. From 2020 to 2023, credit unions opened 950 new locations, doing everything they could to fill the void in banking deserts.
The data clearly shows credit unions are more likely to support financial opportunity in minority communities than banks. Notably, credit unions offer a larger share of mortgage loans to black borrowers than banks, and it’s significantly noticeable when compared to community banks. The same is true for Hispanic and low- and moderate-income borrowers.
Not only does the bank lobby ignore the economic benefits credit unions offer their communities, but it also tries to prevent them from living out their mission: people helping people. Pushing for federal legislation that will stifle credit union growth, out of fear of increased competition, will only hurt the communities credit unions aim to serve.
Outdated field of membership restrictions, arbitrary member business lending caps, illogical fee restrictions, and other ill-informed policy barriers will keep safe and affordable credit union services from those who need them most.
Congress and regulators can remove these barriers. Their valuable time should be used looking at ways to further unleash the credit union difference to increase opportunities and make positive change in their constituents’ lives not chasing bank half-truths.
Those who continue to clamor for more oversight or scrutiny for credit unions aren’t interested in better outcomes for consumers. They’re focused on shareholder profits.
That’s not the way credit unions do business. The credit union industry starts and ends with people – the nearly 140 million consumer-members and communities who rely on them for financial prosperity. That’s who we answer to.
Renée Sattiewhite, President/CEO of the African American Credit Union Coalition
