Credit Union Industry Outlook: 5 Years Back, 20 Years Forward

The big are getting bigger, while small credit unions are shrinking. If current trends hold, half the credit unions around today will be gone in the next 20 years.

The Financial Brand examined asset, member and branch trends in the credit union industry for the years 2007 through 2012. The study revealed a series of massive shifts with serious strategic implications for credit unions of all sizes.

What’s Changed in the Last 5 Years?

Since 2007, the total number of credit unions has dropped 14%. In 2007, there were 8,332 credit unions. Today, there are only 7,165, a decline of 1,167 credit unions. That average loss of 233 credit unions per year, a little less than one per day.

Key Fact: Every month, the industry sheds about 20 credit unions.

Total # of
all CUs
# of CUs
w/$1+ billion
in assets
% of all CUs
with $1+
billion assets
# of CUs w/less
than $100 million
in assets
% of all CUs
w/less than $100
million in assets
2007 8,332 123 1.5% 7,080 85.0%
2008 8,215 132 1.6% 6,920 84.2%
2009 8,066 137 1.7% 6,760 83.8%
2010 7,710 159 2.1% 6,311 81.9%
2011 7,442 173 2.3% 6,023 80.9%
2012 7,165 194 2.7% 5,700 79.6%

In 2007, credit unions collectively held $760.9 billion in assets. By 2012, that number had climbed to slightly over $1 trillion ($1,015 billion), growing 33.4% cumulatively over a five-year period, or an average of around 6.7% annually. 2010 saw the single biggest year-over-year increase in assets: $82.8 billion, a 10.2% spike. This pace edged to 6.7% in 2011, with credit unions tacking on $63.4 billion in additional assets.

In 2007, there were only 123 credit unions with $1 billion in assets or more. By 2012, that number had grown to 194, 57% more that five years ago.

Net Negative Branch Growth Marks Historic Reversal

The number of branches operated by all credit unions totaled 20,694 in 2007. By 2011, that number climbed to 21,433, a slight increase of only 739 branches.

Key Fact: In 2012, the number of credit union branches declined for the first time in the industry’s 100+ year history. There were 27 fewer credit union branches this year than last. We’ve hit the peak and the trend is now reversing. There will probably never be more credit union branches than there were in 2011.

Total # of
all CU
CUs w/5+
CUs w/10+
CUs w/only
1 branch
% of CUs
w/1 branch
2007 20,694 1,006 341 5,393 26.1%
2008 21,122 1,032 350 5,176 24.5%
2009 21,290 1,058 364 5,005 23.5%
2010 21,341 1,075 367 4,520 21.2%
2011 21,433 1,100 402 4,311 20.1%
2012 21,406 1,116 415 4,093 19.1%

Big credit unions are the only ones adding more branches. The number of credit unions with five branches or more grew 11% since 2007, up 110 to 1,116 by 2012. Those credit unions with 10 or more branches saw even bigger increases, up 22%, from 341 five years ago to 415 today. The top 100 now hold 14% of all branches in the credit union industry.

Key Fact: Branch growth has been generally flat for credit unions, but not for the top 100. While the industry has only added 712 new branches in the last five years, 552 of those belong to the top 100 (77.5%).

Credit Union Member Growth Fueled by Top 100

Credit union membership in 2012 swelled to 93.7 million, up from 88.5 million in 2007, an increase of 5.2 million (5.87%) over a five-year period. The average annual increase is around 1.5%, with 2012 seeing the largest bump: 1.5 million new members (1.62%).

In 2012, the top 100 credit unions (ranked by assets) added 1.3 million new members, accounting for 84.4% of all new members gained across the entire industry. In 2011, the top 100 credit unions grew by 1.2 million members while the rest of the industry shed a collective 118,287 members. Similarly in 2010, the top 100 credit unions grew by 1.6 million members and the remaining 7,610 lost 286,419 members.

Total # of
all CU
Net new
for all
# of
to Top 100
% of all CU
to Top 100
# of net new
for Top 100
% of net new
CU members
joining the
Top 100
2010 91,175,370 1,313,996 26,054,728 28.6% 1,600,415 121.8%
2011 92,236,368 1,060,998 27,234,013 29.5% 1,179,285 111.1%
2012 93,735,068 1,498,700 28,498,526 30.4% 1,264,513 84.4%

Key Fact: Membership gains from the top 100 credit unions are generally offset by the collective membership losses realized by the rest.

The Big Just Keep Getting Bigger

The top 100 credit unions also contribute the lion’s share of asset growth in the industry. In 2012, assets of the top 100 equaled $387 billion, or 38% of all assets held by the entire industry. The top 100 credit unions in 2012 added $28.7 billion in assets, accounting for 45.3% of the $63.4 billion gained by the entire industry last year.

assets for
all CUs
Net asset
growth for
all CUs
assets for
Top 100 CUs
% of all
belonging to
Top 100 CUs
Net asset
Top 100
% of CU
industry’s net
asset growth
coming from
Top 100
2010 $896.8 $82.8 $330.3 36.8% $30.0 36.2%
2011 $951.6 $54.8 $358.0 37.6% $27.7 50.5%
2012 $1,015.0 $63.4 $386.7 38.1% $28.7 45.3%

Key Fact: Almost all the gains made by credit unions — in terms of assets, members and branches — come from a handful of the industry’s largest institutions. While the top 100 only represent 1.4% of all credit unions, they contribute half of the industry’s asset growth and about 90%+ of the industry’s member growth.

The Small Get Smaller

By any measure, the future for small credit unions looks bleak. The number of credit unions with less than $100 million in assets has plummeted from over 7,000 in 2007 to 5,700 in 2012 — that’s 1,380 fewer than five years ago, a 20% drop. The number of credit unions with only one branch declined by a similar percentage, down to 4,093 from 5,393 five years prior. Mirroring this trend, there were nearly 2,200 credit unions with under a thousand members in 2007, but only 1,700 remain today.

Key Fact: Over a five-year period, small credit unions (those with less than $100 million in assets) have collectively lost $5 billion in assets and nearly six million members.

In 2007, credit unions with less than $100 million in assets collectively held $131 billion in assets and 23.6 million members. By 2012, those number dropped to $126 billion in assets and 17.6 million members.

Today, 80% of all credit unions have less than $100 million in assets, down 5% from five years ago. In 2007, they accounted for 17% of all credit union assets and 27% of all members. They now represent only 13% of all assets and 19% of all members.

Total members
for all CUs w/less
than $100 million
Total assets
for all CUs w/less
than $100 million
2007 23,611,594 $130,955,476,177
2008 22,893,541 $130,436,860,982
2009 22,175,487 $128,981,918,784
2010 19,936,802 $126,602,264,544
2011 18,825,575 $127,632,660,886
2012 17,646,314 $125,867,933,673
NET LOSS –5,965,280 –$5,087,542,504

2032: What Will Credit Unions Look Like 20 Years From Now

If you stretch current trends out 20 years from now, the credit union industry will look remarkably different than it does today.

For starters, there will be half as many credit unions as there are now. Assuming the industry maintains its current pace — an annual decline of about 3% annually — there will be 3,269 fewer credit unions by 2032. That means one out of every two credit unions alive today will disappear.

Twenty years from now, there will be 1,218 credit unions with $1 billion in assets or more — that’s 31.3% of all credit unions vs. 2.7% today. Only 319 (8.2%) of credit unions will have less than $100 million in two decades.

On a brighter note, overall industry assets should more than double, hitting $2.2 trillion if credit unions sustain an 4% annual growth over the next 20 years. And if membership gains average 1.5% per year, credit unions will hit 126.2 million members by 2032, an increase of 32.5 million new members. If those numbers indeed materialize, that would mean exactly one in every three people in the U.S. would belong to a credit union in 2032 (vs. 29.3% today, a 4% increase). Of course, the vast majority of those members will be associated with the biggest credit unions in the country.

As for the size of the credit union industry’s branch network, a five-year retrospective analysis isn’t very helpful. At face value, the data might suggest the number of credit union branches will plateau, perhaps holding steady around the 20,000 level. That’s not likely to be the case. Experts in the banking industry broadly agree that branches are on the decline. If their predictions come true, there could easily be half the credit union branches there are today. Or even fewer.

Bottom Line: Asset growth will come much easier than member growth… for those credit unions that survive the coming purge. Membership growth has always been — and will almost certainly continue to be — the biggest challenge credit unions face. Small credit unions will have to fight just to avoid losses, both assets and members.

A world with only a couple thousand credit unions — each with only one or two branch locations — could be closer than you think.

This article was originally published on September 4, 2012. All content © 2018 by The Financial Brand and may not be reproduced by any means without permission.


  1. Anthony Demangone says:

    This is simply a FANTASTIC analysis. Many thanks for the time and effort taken to put this together.

    – Anthony Demangone, NAFCU

  2. Nice work Jeffry. Awesome analysis.

  3. Jason M. Dias says:

    I have been saying this for 10 years. I said on my radio show that Bank Transfer Day would not have a profound impact on the CU Marketplace with the exception of big credit unions. Sorry CU “Movement” types, but I told you so and have been telling you so for years. Best CU article of the young decade. Bravo Financial Brand.

    Jason M. Dias
    President, Eloquent Online

  4. Thanks for laying this out in a simple to understand format. Key take-aways for me from this is that scale matters – consumers gravitate to larger institutions while the smaller CUs struggle to garner relevance from existing membership and non-members. How will ~7,000 CUs with assets <$1 billion respond?

  5. Denise Wymore says:


    Nice work. I’ve always admired the level of research you put into your articles.

    So my question to credit union’ers – not haters – are we going to accept this? As Gene Blishen so eloquently stated in his blog today “I believe the key component to losing credit unions is their own belief that they are no longer relvant to their membership.”

    Big banks crippled this economy. Are we destined to be “too big to fail” and contribute to the final economic collapse of the US or are we willing to put in the work and remain relevant?

    This is the International Year of the Co-Op! And the 105th year of the credit union movement. I refuse to accept that we are going to shrink that rapidly.

  6. Serge, that’s a good point about scale. But I wonder if consumers indeed gravitate to the larger CUs, or if it’s an issue of brand awareness. Perhaps large CUs are the only ones with the resources to market themselves effectively? A $1 billion CU has a $1 million marketing budget. A $100 million CU only has $100,000, which is hard to work with; it essentially rules out any mass media/advertising.

    There are, of course, other issues concerning scale. The biggest and most important one concerns the online channel: product offering, innovation, quality of experience, marketing, etc. It’s difficult for small organizations (in any industry) to remain competitive in the fast-moving world of technology. Small CUs are generally at the mercy of whatever their core DP provider offers.

    For reference, readers might want to take a look at this article, “Credit Union Marketing Budgets: Too Much, Too Little?” It outlines the marketing investment per member for CUs of different asset classes. What would be great is knowing what marketing costs were per NEW member.

  7. An excellent, epic piece, Mr. Pilcher. I shared it with my partners at my firm.

  8. Rob, Denise, Serge, Randy and Jason,

    Thank you all for your feedback. I respect each of your opinions, so hearing good things from such a smart, diverse and prestigious group in truly an honor. I appreciate your comments, and thanks again.

    Jeffry Pilcher, Publisher
    The Financial Brand

  9. Which markets does this analysis include? North America, global…

  10. Hi Adam,

    Thanks for your question. This analysis is for the U.S. only. Sorry, that should have been made more clear in the article.

  11. Perhaps it’s worth pointing out that the smaller CUs aren’t evaporating into thin air — they’re merging into larger CUs. I think what we’re seeing is mainly that the minimum viable size to compete has increased as margins get squeezed.

    This process is pretty limited, so I don’t know that you can extrapolate anything useful for 20 years. I do think the conclusion that we will never again see a larger number of CUs is correct.

    Is it worth mourning the small CU? In some ways yes, in some ways no. Large CUs have to work very, very hard to resist the “call of the mild” and falling into corporate blandness. Small CUs have always seemed to have a lot more “personality” on average, more varieties of that unique CU flavor.

    On the other hand, members of the smaller CU end up with better access, services and pricing after a merger with a larger CU.

    The other concern I have is whether it’s become impossible to start a new CU. You certainly can’t start a credit union with a shoebox in a locked drawer any more. When’s the last time a new CU was created in the US?

  12. Again, a straightforward and insightful analysis of a sensitive issue. Bravo!

    The available data is aggregated for all credit unions. When looking at the long-term viability of a credit union we must consider each market by relative size and relevance in terms of local/SEG presence combined with the ability to deliver a competitive array of services through all delivery channels. The leg up for small credit unions in small or segmented markets is local home town connection. But to survive they need to find new more efficient ways to deliver services through the branch and on-line and find strategic partners to raise their ability to create economies of scale and substantially improve their efficiency ratios.
    We also need to ask the question: are mergers really bad for credit union members, their communities and the industry? There are examples on both sides, but you can look at CU’s like Vancity Credit Union, Vancouver BC ($18 billion), where over 50 credit unions have merged into a highly competitive financial institution with world class services that returns significant benefits to its members and communities through great service, community investment and their sustainable banking initiative.

    The future is strong for small credit unions that find their niche, hold a unique brand position and drive efficiency. For others, mergers will likely be the right strategy for sustaining their promise to members into the future.

  13. Jon A. Reske says:

    If one looks at the banking industry in general you have seen the same type of consolidations over the past twenty years, so this study does not surprise me. I understand the scalability concept is in play here but there is more going on for sure. I think many, but not all, credit unions who have gone by the wayside have brought their demise on themselves to a large degree.

    I have been in this industry for over 15 years and I have seen a pattern of activity that I feel could explain at least part of this trend. First off you have the CEO who decides to retire while on the job. This person usually has 10 years or less to retirement and just refuses to make any business decisions that might jeopardize that event. They just will not take any risks whether calculated or not even after their own managers beg to try new things. There is always a reason, but the main one is that don’t want to rock the ship before they leave.

    And their Board is ok with that. Because they don’t want to take any risks either. I bet the average length of service for credit union board members is 25+ years, and many are stuck in the past. That is slowly changing mainly because of the tighter requirements for being on a board which requires them to have a new skill set to understand more complex financial issues, so they decide to “retire from the Board”. But that change might be too late to make any difference now.

    I also feel many credit unions because they didn’t have to market themselves 20 years ago just do not have the right skill set and culture to do so now when their very existence requires it. Many do not understand the concept of a “Unique Selling Proposition”. They think “great friendly service” is the ticket to success. Gee I hope you have great friendly service seeing you are in a service industry. That’s like says we are really good at counting money. That’s the “price of entry” not a point of market difference.

    Look at all the credit unions who became community charters but just could not change their old name because of some mistaken believe that they had to hang on to the past, so they come up with some acronym that links them to a time gone by. What kind of brand is ABCFCU anyway? Who would trust their money to a name like that? Or they come up with a name that makes no brand sense. Many went community, built all kind of branches, but had no skills to compete in the very competitive world of community banking and can’t understand why no one wants to “buy their violets”.

    They really believe when they open their doors and they turn on the lights they must be in business. Unfortunately they might be open but they are just irrelevant in the marketplace.

    And finally they totally forgot they are cooperatives. One of our board members went to a conference in March and a speaker ask the audience of mainly credit union volunteer board members how many were cooperatives? He said about 25% raised their hand. The cooperative business model is one of the most resilient and positive business models going and 75% of those in attendance, the very group charged with strategically giving vision to the organization , didn’t even know what they were.

  14. Jeffery,

    Great stats and article, but as Brian mentioned above, having some info on the mergers that took place in that time frame may bring more insight into the subject. The numbers seem to suggest that mergers may have a rather large role in these trends…at least from the few minutes I have been able to review.



  15. “I have been saying this for 10 years. I said on my radio show that Bank Transfer Day would not have a profound impact on the CU Marketplace with the exception of big credit unions. Sorry CU “Movement” types, but I told you so and have been telling you so for years. Best CU article of the young decade. Bravo Financial Brand.

    Jason M. Dias
    President, Eloquent Online”

    You’ve been talking about Bank Transfer Day for 10 years?

    In my experience, the size of the intitution has no bearing on the “small credit union service” feel I’m sure you’re implying is missing. My current CU is poised to become the largest in our state, and they are now more than ever focusing on personal member interaction and “street-level” problems.

  16. In Jason’s defense, I believe he was making two separate points: one, that big CUs dominate the industry, and two, that Bank Transfer Day really only benefited big CUs.

  17. My credit union for municipal employees recently merged with some other outfit. Reasons given for the merger were – more branches for members; greater capitalization.

    But we already had good access to ATMs like Walgreens, Walmart, other CU’s etc. I never felt a shortage of places I could use for deposits or cash.

    And what was the need for more capitalization? I asked if they had a capital problem and they said no.

    With all the problems with big banks I want to know who benefited by this merger and who was pushing it. Reasons supplied members certainly seemed flimsy and unconvincing. But you know somebody benefited $$$$$$$ Follow the money is the key question in any situation like this.

  18. Bill, it’s a bit tricky to “follow the money” in credit union mergers. Since there are no shareholders in credit unions, there is no direct transfer of wealth. Technically, these are pure “mergers” and not “acquisitions” where money changes hands. One organization is simply folded into the other.

    That said, there are often a few individuals who gain financially when credit unions merge. For instance, one of the CEOs at the two credit unions’ may get a tasty retirement package, as was the case with Servus CU in Canada where one CEO raked in $4 million as he stepped aside. But this isn’t usually the case. What happens most often is that a handful of execs at the smaller CU are eliminated, and the rest are given new roles (usually with a raise) at the merged institution. The amount of money involved is typically inconsequential.

    Remember, merger decisions are made by a credit union’s board of directors (pending approval by members). These CU boards are all 100% volunteer positions involving no compensation, so the people actually pulling the trigger stand to gain very little. There are some big credit unions that extend very generous perks to their board members, like free travel to industry events or board meetings in Ireland, and this may certainly seem attractive to a board at a smaller CU, but I suspect this isn’t (often) a major motivation to merge. And the merged institution only retains some/one (sometimes none) from the smaller CU’s board.

  19. WilliamG says:

    Do you have any information on how many new credit unions have been formed in the last few years? The CEO of an existing credit union has suggested that he would help my company form a new credit union to benefit the franchisees in our system. We have approximately 4,000 stores with 2,500 owners.

  20. Norm Phillips says:

    Good information but what does it mean? You can’t just endlessly follow the trends until there is just one big credit union and expect it will still exist in that form. The consolidation of credit unions is not out of line with what happens in the banking world. I disagree that there is a crisis of confidence. The real issue is that there are far fewer credit unions being started than ever before. Banks pop up and are merged out all the time. Their numbers grow. For credit unions the merger side is alive but not the start up. Credit unions of $100 million and less would continue to grow if there was an environment that allowed them to be created.

    The implications are more political than what is being recognized or addressed. Can credit unions continue to maintain their NCUA independence and tax status when there are fewer and fewer players that are bigger and bigger?

    Those big credit unions (of which I’m a part of) play in the business lending arena. No matter how good you are on the consumer side, that gives haters ammunition in the “walks like a duck…” argument.

    If we don’t break down some of the roadblocks for dedicated people to create new credit unions, the future could be that we don’t make it to 20 years out. Losing the high ground and the support and political clout that comes with it, will eventually lose the day on legislation that will convert us to banks.

    A sad day for sure.

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