A recent commentary in the Washington Examiner by two prominent credit union leaders sheds light on a crucial but often overlooked aspect of the financial industry: the true measure of a credit union’s (Saccos) value lies not in its size but in its commitment to serve its community.
Leigh Brady, president and CEO of State Employees’ Credit Union in the USA, the nation’s second-largest credit union, alongside Deborah Fears, president, and CEO of Chicago Post Office Employees Credit Union, a smaller but pivotal institution in Illinois, passionately defended the essential role credit unions play in providing exemplary service and access to financial resources.
This followed an ongoing debate in Washington, DC, surrounding potential taxes on credit unions, unveiling a deeper misunderstanding of their purpose. Critics argue that credit unions have grown “too big” and strayed from their foundational mission. However, Brady and Fears argue compellingly that size is not the measure of a credit union’s effectiveness; rather, it is their unwavering dedication to serving people and their communities that distinguishes them in the financial landscape.
This commentary echoes a critical concern: recent efforts by banking interests to dismantle the not-for-profit structure of credit unions threaten to eliminate essential competition in the financial sector. As Brady and Fears point out, since 2019, banks have largely contributed to the creation of new banking deserts—areas lacking adequate access to financial services—while credit unions have expanded their branch presence in rural areas, countering this trend.
The implications of imposing a tax on credit unions extend beyond the institutions themselves and reach directly into the pockets of consumers. Independent studies commissioned by America’s Credit Unions estimate that a significant reduction in credit union market share could result in a staggering $22.8 billion annual cost to bank customers, manifesting as higher loan rates and lower deposit rates. This is a stark reminder of the interconnectedness of our financial systems; when credit unions thrive, consumers benefit.
At the heart of the credit union model lies the ethos of “people helping people.” This fundamental principle drives credit unions to lower financial stress for their members and non-members alike. With a total economic impact of $297 billion and more than $35 billion in consumer benefits in the USA alone, credit unions fulfill a vital role in the economy, offering more than just traditional banking services. They foster community relationships and ensure that even the most underserved populations maintain access to essential financial resources.
As we consider the future of the financial landscape, it is critical to remember that a credit union’s impact is defined not by its size but by its mission to serve and uplift its community. By prioritizing people over profits, credit unions exemplify the true spirit of financial cooperation and solidarity in times when it is needed most. They are not simply alternatives to banks; they are essential partners in the fight for equitable access to financial services.
