During the Great Depression, the federal government incentivized credit unions to provide consumer-focused financial services to people of modest means by granting them a tax exemption. Given the severity of that economic crisis, the policy was crafted to help at-risk communities weather difficult times by expanding access to credit. However, the industry has evolved over the last 100 years — calling into question their preferential tax and regulatory treatment.
U.S. Eagle Federal Credit Union lists among its common bond provisions “people who are 50 years of age or better and residents of New Mexico”. When credit unions were granted tax exemption, age was not listed as a form of commonality.
In 2015, the NCUA board proposed a new ruling enabling the entire state of North Dakota to be designated as a rural district for common bond purposes, even though more than half of residents live in urban areas.
$1.3 billion American Eagle Federal Credit Union converted from a federal credit union to a state credit union, which allowed them to expand their membership widely across almost the entire state.
A study by the New Hampshire Bankers Association and the Community Bankers of New Hampshire found that 44 percent of small banks in the state serve New Hampshire’s least wealthy counties, while only 15 percent of credit union branches (14 branches) serve those similar areas.
In an effort to expand memberships and profits, Montana First Credit Union has attempted multiple times to merge with various other mega credit unions, including Horizon Credit Union.
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