Credit unions operate in a world of financial services dominated by for-profit banks (which are, by the way, our real competition). When credit union industry conversations dissect each other’s decisions in the court of public opinion, who does it serve? Doing so certainly does not serve the credit union mission especially when we need to unify our voices and more fervently make the case for why Americans are better off when banking with credit unions.
Starting with the facts
As a reminder, banks hold exponentially more assets than credit unions. In 2024, the banking industry held over $30 trillion in assets compared to credit unions' roughly $2 trillion. Does it not shock us to the core to know the assets held by a single bank, JPMorgan Chase, at $4 trillion, are roughly double the assets held by the entirety of our movement?
And, while both banks and credit unions have seen significant asset growth in recent years, the pace of that growth favors banks.
The challenge
Banks’ profits continue to soar while countless Americans struggle to access affordable financial services. The largest banks wield their size and power to influence politicians and regulatory bodies to shape policy in their favor while they have gotten taxpayer-funded bailouts and charged their consumers billions in fees.
To have a real shot at challenging the big banks for consumers’ hearts and minds, we credit unions must unify more effectively and rethink how we offer services. After all, when credit unions were chartered nearly 100 years ago, there were no digital channels through which to serve our members, service centers were often embedded in a workplace and not scattered through our communities, and consumers were not moving jobs, and moving across the country, at the rate they do today. It is imperative we keep up with the changing environment in which we operate and advocate for our unique business model, or our industry will be in peril.
Why a merger-of-equals strategy
Over 10 years ago, while I was working at Filene Research Institute, I first heard the term “merger of equals” when my colleague, George Hofheimer, published a related article in 2013. The research noted the reasons this trend was on the horizon: the need for scale, the regulatory environment (which impacts larger credit unions more significantly) and consumers’ evolving and increasing demands. Sound familiar? These are the very reasons cited today for most mergers and certainly mergers of equals.
When large credit unions embark on a merger of equals strategy, the purpose should be driven by a need to do better—to better serve, create more impact, provide more attractive rates, etc. And, yet, the perspective of some in our industry has unfairly been that large credit union mergers of equals are a cause for angst.
Of course, when a merger (any merger) means a loss of focus on local impact, or there is an over-focus on revenue and/or cost reduction, or a great culture and employee experience are eroded, or there is a loss of member value, we should all be concerned.
The other side of that coin, however, is that mergers, when intentionally and strategically planned and executed, can absolutely bring new, unfound value—to employees, members, and the broader community. When promises made become promises kept; when credit unions find more creative and meaningful ways to serve the underserved; when optimization is no longer simply a goal, but a reality; when investments are made in technology and service hours are expanded; and, when security and risk are better managed, what emerges is stronger, more vibrant communities.
(An aside: merger-related research shows members do in fact experience “better” when credit unions merge.)
Let’s strengthen the movement, not divide
Consolidation is happening across the financial services ecosystem, from banks to fintechs to industry suppliers and system partners, and, yet, when credit unions make the strategic decision to merge, especially larger, healthier equals, it’s often met with disproportionate scrutiny. This evolution of our system is inevitable. The real question is whether we choose to support one another through it or tear each other down in the process. As Taylor Swift reminds us, “haters gonna hate,” but we don’t have to play that game.
Instead of criticism and second-guessing, what if we redirected that energy toward collaboration, innovation, and advocacy? Because when we undermine each other, we’re not just weakening individual institutions, we’re handing ammunition to those who champion profit-driven banks over member-owned cooperatives.
Mergers of equals, done right, can be a powerful force for good. Let’s treat them that way.
