Can the Movement Reach for a Common Vision?

Our common values will continue to be the foundation of our success.

October 1, 2012

With International Credit Union Day on Oct. 18 and the International Year of Cooperatives winding down, now’s an opportune time to step back and look at how our credit union movement is doing.

One of the most striking developments has been the astounding growth in credit union membership. Not too long ago, the movement was wringing its hands over a pattern of weak membership growth.

But that was before the consumer revolt that began in late 2011 over excessive bank fees, and the similar frustrations with banks.

Both gave  rise to the viral phenomenon known as Bank Transfer Day. Its one-year anniversary is Nov. 5.

The net effect lit a fire that encouraged legions of frustrated consumers to turn to credit unions, and, in many cases, they took the next step and became members.

The membership numbers are striking, and it’s clear the momentum carried beyond Bank Transfer Day and well into 2012. Indeed, every day really is Bank Transfer Day.

As of year-end June 2012, credit unions added 2.2 million net new members, according to NCUA.

For perspective, consider the 2.2 million gain in new membership is the fastest increase we’ve seen in the past decade. And remember, this is net growth, subtracting closed accounts.

This means the actual number of new memberships is even higher. The 2.2 million in net new membership growth is also 80% higher than the 1.2 million average during the past decade, and nearly four times greater than the 550,000 net new members added in the 12 months ending June 2011.

We saw further evidence in the online traffic at aSmarterChoice.org—the consumer website CUNA and the leagues launched in March 2011 to give consumers the basics about credit unions and steer them to credit unions they’re eligible to join.

In the months after its launch, the site received about 2,000 visits a week. In the run-up to Bank Transfer Day, the visits averaged 4,000 a week, spiking just before Bank Transfer Day at 70,000 visits in one day. In 2012 it has averaged between 5,000 and 6,000 visits a week.

People are turning to credit unions for value, great service, and a sense of community—and credit unions continue to deliver.

The latest “trust index” from the highly respected Chicago Booth/Kellogg School this summer recorded a startling drop in the public’s trust of national banks (23% on the trust index). Their reputations were badly bruised from the financial crisis.

But the public’s trust in credit unions rose on the index from 58% to 63%. Those findings are consistent with CUNA’s own polling data that found high favorability ratings for credit unions. And among those who use credit unions as their primary financial institution, virtually all view credit unions favorably.

Clearly, to use credit unions is to love credit unions. It’s heartening to see so many consumers discovering what we’ve been saying all along: Credit unions are the best choice for financial services.

For all those gains, however, I believe the movement has the potential to reach still-greater heights. I would like to see today’s credit union movement strive toward a common vision in which a majority of Americans choose credit unions as their best financial partner.

U.S. credit unions crossed several major milestones this past year—exceeding $1 trillion in assets and 95 million members. We’ve come far, but we’re not there yet.

Credit unions still have:

  • About 7% market share of household financial assets versus banks and thrifts;
  • Only 95 million members in a nation of more than 300 million people, meaning most Americans still turn elsewhere for financial services; and
  • Fewer than half of these 95 million members use their credit unions as their primary financial institutions.

NEXT: ‘Plan to Win’



‘Plan to Win’

Despite all the recent attention we’ve received in social and traditional media, most people still don’t know what credit unions are or how we differ from banks, and most don’t think of us first for financial services.

We can overcome these challenges. It will take time, effort, and a unified approach, but I’m confident in our ability to succeed.

Working together, we can remove legislative and regulatory barriers that hinder our progress. It will require an even higher level of political involvement and commitment from a movement already known for its grassroots abilities.

CUNA and the leagues are implementing a Plan to Win for America’s Credit Unions to propel us forward. We’ll need to find new ways to further educate consumers about credit unions and raise awareness through media outreach, social media, and advertising.

A number of credit unions and leagues are already making impressive gains in all of these realms, and they can serve as models.

Our movement, which so excels at service, must collaborate to ensure we maintain our lead and to ensure the member experience is consistently great as more consumers come our way. CUNA and the leagues stand ready to assist.

It’s all achievable, and I’m personally excited about the prospect of moving in this direction. Why not 115 million total credit union members in the next decade?

Why not double the movement’s assets during the same period? Why not break the stubborn ceiling on market share?

It can be done by a movement whose values—member ownership, community involvement, an adherence to the principles of cooperation—have such resonance in society today.

As cooperatives, credit unions are dedicated to advancing the financial well-being of their members in ways the banking industry will never understand. Our members matter most.

We’ve seen our appeal draw tremendous membership growth this past year. And I’ve seen the same attraction in other countries’ credit union systems, most recently during a visit to Poland for the World Council of Credit Unions’ World Credit Union Conference in Gdansk.

Since the fall of Communism, credit unions have grown to become a vital part of Poland’s financial services sector—an amazing accomplishment in a relatively brief stretch of time.

“To lead the world into the 21st century,” Nobel Prize winner and Solidarity Party founder Lech Walesa said during the World Council’s meeting, “we need to reach for  values. There’s great service that you can provide in helping us achieve this revolution.”

Each credit union—whether in the U.S. or abroad—relies individually on its values as it strives to meet and exceed members’ expectations. That same drive and belief in our mission will enable us to become consumers’ best and natural choice as a financial partner.

Our common values and purpose as member-owned cooperatives will continue to be the magnet that draws them—and the foundation of our success. I join you in  celebrating those values and common purposes on this International Credit Union Day.

BILL CHENEY is president/CEO of the Credit Union National Association.