WASHINGTON—Credit unions continue to serve a disproportionate share of Americans with modest incomes and limited wealth—households banks are less likely to reach—according to new analysis shared by America’s Credit Unions Chief Economist Curt Long during a Governmental Affairs Conference session.
“It’s pretty clear there’s sort of a sweet spot for credit unions: below median income and net worth. These are people who are, by definition, of modest means. Then on the bank side, it’s true that they serve some low-income households, but among those low-income households, they're primarily serving high-net-worth households. And on the other side, yes, they do serve some low-net-worth households, but those tend to be high-income,” he said. “So, it's either one or the other, while credit unions are fulfilling their mission of serving people of modest means, people who, you know, banks are really not interested in servicing.”
Senior Economist Dawit Kebede said the forecast looks relatively positive, with the economy growing, a steady labor market, and retreating inflation, while noting that world events may lead to additional uncertainty.
Analyzing the credit union difference, he said that a consumer getting a $40,000 loan over six years from a credit union saves $15,000 over the life of the loan compared to auto finance companies, and $10,000 compared to banks.
“Credit unions remain a trusted partner of members throughout any kind of monetary policy,” he said.
The Data and Tools section of America’s Credit Unions’ website contains the data covered in the presentation, as well as bank comparisons, economic forecasts, and more.