Credit Unions are America’s Second Largest Depository Financial System (Updated*)

The $952 billion cooperative industry sneaks past the thrifts for the first time.


It’s now official — credit unions are No. 2! (please see update in the comment below*). With assets of $952 billion as of March 31, 2011, credit unions have surpassed the $930 billion thrift industry for the first time in history, becoming the second largest financial system in the United States.

This milestone shows how much Americans value the cooperative financial model that puts their interests first. Credit unions are different by design. Many economic models are based on self-interest, but credit unions are based on self-help and cooperation.

Credit unions are the community lenders of the 21st century. They raise local funds and re-lend them to members, creating common wealth that is passed from one generation to the next. During the Great Recession, credit unions set a two-year lending record by originating more than $525 billion to 39 million members. While Washington policy makers were focused on Wall Street, credit unions — through their lending and community initiatives — took care of Main Street. 

For example, credit unions have modified more than $8 billion in first mortgages, allowing 50,000 members to stay in their homes during the country’s continuing housing crisis. 

The growth milestone that made credit unions the second largest financial system* is a result of the deregulation of financial services in the early 1980s.Consumers increasingly prefer institutions that, when granting credit, empower members and enhance the community’s well-being. 

Starting in 2010, credit unions ramped up their efforts to refinance members’ outstanding loans so they could take advantage of record low interest rates. In many cases, members saved hundreds of dollars every month. That’s cash in their pockets. Such refinancing activity continues today. With this strategy, credit unions create shared wealth in a win-win approach to economic challenges.

Credit unions’ tax exemption combined with their member-owned structure creates a unique hybrid role in financial services. Like other financial institutions, they must provide value for their users or risk going out of business. Credit unions, however, also fill a vital public policy role: They provide credit when other financial institutions will not or cannot because of market conditions.

Credit unions demonstrated this countercyclical lending capability during the credit crisis. Credit unions launched a new private loan program for college students  during a time when secondary market funding was not possible. To date, credit unions have served more than 220,000 students and families and hold more than $1 billion in student loans on their balance sheets.

In an economy with uncertainties overshadowing future growth, credit unions provide a positive model for all Americans. This is truly a financial system we can all be proud of.


June 2, 2011


  • Chip:

    You only looked at OTS-regulated thrifts. There are state chartered thrifts that are regulated by FDIC.

    Thrift industry assets as of the end of the first quarter of 2011 are $1.257 trillion, according to the FDIC's Quarterly Banking Profile.
    Keith Leggett
  • *Well not quite yet! The headline is premature. Keith Leggett is correct in that I only included OTS regulated thrifts which totaled $930 billion and not FDIC insured state chartered thrifts with approximately $327 billion in assets. This makes the total thrift industry $1.257 trillion, which Keith refers to above.

    However, credit unions have a consolation prize. When the OTS is merged with OCC in the next several months, the NCUA will then become the second largest charter regulator in the country. So, one component of the credit union system will indeed be No. 2 very shortly.

    Chip Filson