The Impact of Credit Unions on the United States

Complex Credit Unions Leverage Investor Capital to Fuel Growth Initiatives As the regulatory regime for credit unions becomes more relaxed, complex credit unions have become indistinguishable from community banks. Their ability to raise investor capital with 30-year horizons facilitates growth that goes well beyond credit unions’ original purpose.  

PenFed’s Got “Great Rates” for Everyone. Really. Everyone.   PenFed has wasted no time in aggressive use of this prized open charter — a giant loophole hiding in plain sight —and has eclipsed the credit union industry’s overall growth rate in the first half of 2022 by a whopping seven percent. We’re here to ask – why haven’t policymakers taken action to crack down on this brazen misuse of credit union advantages? 

The Booming Business Behind Credit Union Bank-Buying Deals It’s not just credit unions that are making a pile from buying banks. As it turns out, there is a cottage industry of consultants and advisors behind these deals, which are fueled by credit unions’ federal tax exemption. 

For-Profit Investors Take Note: Non-Profit Credit Unions are Ready to Borrow To borrow from the great line purportedly uttered by late Sen. Everett Dirksen about spending in Washington – “a billion here, a billion there, and pretty soon you’re talking about real money” – credit unions are taking huge advantage of their regulator’s relaxed position on the highly profitable not-for-profits by raising hundreds of millions of dollars a quarter from hedge funds and other for-profit investors in the form of subordinated debt.

Curb Your Enthusiasm: Large Credit Unions Buying Banks is Nothing to Cheer The growing trend of credit unions buying banks is troubling in many ways. Perhaps the worst is that communities where large credit unions swoop in–especially in low- and middle-income areas–do not benefit from these transactions, despite egregious claims made by the head lobbyist for the largest credit unions in a factually tenuous op-ed in the American Banker.