Credit Union Growth
Consumer-friendly approach drives credit union member growth in the Keystone State
Not-for-profit credit unions are becoming more popular among consumers looking for the best deals in financial services. The 545 credit unions in Pennsylvania count more than 3.5 million members. These Pennsylvanians have turnred to member-owned, democratically controlled credit unions as alternatives to for-profit financial institutions, which often use high fees and high minimum balance requirements to maximize profits.
More than 1 million members have joined financial cooperatives in Pennsylvania from year-end 1990 to present, pushing total credit union membership to over 3.5 million. Membership has more than tripled since 1970 when total membership was 983,000.
"People are learning that as not-for-profit cooperatives, credit unions offer consumers better rates for savings and loans. Credit unions have fewer and lower fees, and their credit card rates are often four points or more below some bank cards. Credit union members also know they'll be treated like part of a family, not like an account number or just as a profit center," stated James McCormack, President/CEO of the Pennsylvania Credit Union Association.
"This consumer-friendly approach — being member-driven, not profit-driven — helps people to get ahead financially by letting them keep more of their money."
Pennsylvania has the one of the highest number of credit unions in the country with 545. As of June 2010, Pennsylvania credit unions had over $33 billion in assets and $28 billion in shares/savings accounts, and 3.5 million members.
While a small percentage of credit unions have grown to offer a variety of financial services, including mortgage and home equity loans, ATM services, credit cards, IRAs, education loans and other services, the majority of Keystone State credit unions remain small operations in terms of a financial services provider.
Despite credit union growth, banks continue to tower over the financial services field.
At year-end 2009, the credit union market share was 6%, as it was also in 1992. In contrast, the commercial bank market share in 1992 was 73% and has increased to 81% of total financial institution assets. As of September 2009, banking institutions held nearly fifteen times more assets than credit unions ($13.4 trillion vs. $885 billion). Each of the nation’s four largest banking entities are larger than the entire credit union movement. The average banking institution is 14 times larger than the average credit union ($1.6 billion vs. $115 million in assets). At September 2009, over half (55%) of all U.S. credit unions had less than $20 million in assets. Overall, 3% of banking institutions are this small.
In recent years, bank assets grew as much as credit unions have totaled in 86 years. Bank profits are also climbing at a rapid rate, paced by record profits from fee income.
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