The Credit Union Membership Growth Problem

An information firm catering to the credit union community recently posted online that credit unions grew membership “4.0% annually, faster than their annual pace of 3.5% in June.” This statement was based on an analysis of early filers of 3rd quarter credit union call reports. While this statistic may be factually correct, this information belies the true credit union membership growth experience.

Consider the following data, compiled from complete second quarter call report filings:

  • The average member growth rate was approximately .98%
  • A full 47% of all credit unions (3,325) experienced zero to declining membership growth
  • Of the credit unions experiencing negative membership growth, the average decline was 6.17%

The point in showcasing this most basic information isn’t to suggest that the presentation of 4% or 3.5% growth in membership is incorrect, or to tarnish the growth success some credit unions are experiencing. It is simply to drive an acknowledgement that for nearly half of all credit unions, membership growth does not exist – at all. If not corrected, this lack of membership growth in so many credit unions will result in a very real industry crisis.

At Glatt Consulting, we do not calculate credit union trend data based on a sample of call reports. We wait until we have the complete set of data for all reporting credit unions before commenting on data trends. But even if the 4% annual growth is proven to be a broad trend, we believe that the data will still show that the 4% membership growth is being driven by a small percentage of the credit union community. The truth is that the survival of credit unions with continued declines in membership cannot be guaranteed even in a time where annual growth in membership is reported to be improving by leaps and bounds.

For a frame of reference, consider the second quarter of 2002, a quarter in which we had a similar contrasting “tale of two cities.” In one city, comprised of 59% of the credit union community, average membership growth was over 7%. In the other city, populated by the remaining 41% of the credit union community, average membership declined by nearly 7.5%. In the ten years since, we have seen the closure, through merger or liquidation, of 2,811 credit unions.

Certainly not all of those 2,811 credit unions closed because of declining membership, but we would surmise that among the many challenges that faced the now-shuttered credit unions, membership growth was a major one.

We celebrate any growth in the credit union community with regard to membership, and tip our hat to those working so hard to convince consumers not currently affiliated with a credit union to give the industry a shot. But the lack of membership growth for so many credit unions remains a serious threat. This problem requires acknowledgement and focus – after all, the road to recovery begins with admitting the problem. Our industry issue with membership growth is a problem worth admitting because the alternative – utilizing the success of one half of the industry to paper over the shortcomings of the other half – is not a viable path to a healthy and thriving credit union community.


  1. Tom – great post – a much more nuanced perspective on the net impact Bank Transfer Day has had on credit union membership. Do you have any sense of what other trends emerge from the data, i.e. small versus large credit unions, urban versus rural, SEG versus community charter, etc?

    David Frankil
    NAFCU Services Corporation

    1. Thanks for the comments David. To your question, we are working on a more defined breakdown of growth amongst the different segments you defined. Hope to have a follow up post on the subject shortly. We will also take the same look at 3rd quarter data as soon as it comes out.


    1. Thank you Sean… and I agree with you regarding the awareness problem. You and I both know Neil Goldman. I understand he used data to back up the same point at the recently-concluded California/Nevada Credit Union League annual meeting – challenging attendees with the fact that we are not as well known as we think we are. I think he’s right.

      I also believe we give too much credit to the news media and and financial gurus as catalysts for market awareness. Individual credit unions, especially those with membership growth problems, need to do better on their own at driving brand awareness within their own markets. Broad formal and/or informal campaigns can drive awareness and new members as we have seen over the last year, but generally the benefits fall to the credit unions that need the least outside assistance to grow – not to those that really need greater visibility.

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