Despite an improving economy and growing consumer confidence, there’s still turmoil in the financial world of millions of consumers. The American Consumer Council (ACC), a non-profit consumer education organization, calculates that nearly 32% of all consumer households remain “financially under-water” as a result of the 2008 Great Recession.
According to ACC’s president, Thomas Hinton, “Millions of consumers and American households are still paying the steep price for the irresponsible actions of those major banks and Wall Street investment firms that betrayed consumers and caused financial devastation during the Great Recession. Its repercussions will be felt for another decade.”
And so, it should come as no surprise that millions of consumers have been drawn to credit unions during the past six years. CUNA announced that credit unions surpassed 100 million memberships nationally, according to data collected from credit unions in CUNA’s June 2014 “Monthly Credit Union Estimates.”
In the past 12 months (June 2013 to June 2014), credit union memberships expanded by 2.9%, compared to 2.5% in 2013 and 2.1% in 2012, according to CUNA data. Credit unions added a total of 2.85 million additional memberships over the past year - the largest reported increase in more than a quarter century. And, in percentage terms, the 2.9% increase was the fastest since 2000, according to the CUNA analysis. However, according to CUNA, there was some negative news. Some 54% of credit unions experienced a decline in their membership numbers during the second quarter of 2014.
ACC’s Hinton, said, “This surge in credit union membership growth is just the tip of the iceberg, but it could be blunted if the NCUA fails to allow associations like ACC to continue to partner with credit unions.” Hinton noted that the NCUA has proposed new associational common bond policies that will hurt consumers by limiting their ability to join credit unions through legitimate associations like ACC.
Hinton said, “It makes no sense for the NCUA to create more regulatory barriers for consumers who desperately need and want the financial services offered by credit unions. There’s no question that credit unions have been a life-saver for millions of consumers since the Great Recession as banks are limiting their consumer lending and focusing resources on commercial businesses. Almost half of our new ACC members say they want to join credit unions, but the federal regulators are making it too difficult with their punitive policies and anti-consumer attitude. It’s very frustrating for consumers and credit unions. We don't understand why the NCUA is undermining the very industry it is sworn to protect and sustain.”
Hinton also addressed the need for credit unions to appeal to a new pool of potential members. “When you consider that only 14% of the Millennial Generation (ages 14-28) belong to a credit union, there are millions of young consumers that need to know about the benefits of credit unions. But, if the NCUA makes it too difficult for Millennials to join credit unions, they’ll just go online and deposit their money in a big bank. The end result is credit unions will lose the overwhelming majority of the Millennial Generation to banks, and the financial needs of young consumers will be hurt in the long term.”
The American Consumer Council currently partners with over 47 credit unions across the nation to provide financial services and educational programs to its 148,000 members. ACC has asked the NCUA to continue to allow federally-chartered credit unions to add established national organizations like ACC as associational SEGs.
Mark Wilson is a marketing and public relations manager for the American Consumer Council. He can be reached at: email@example.com