Credit Union Membership Soars In 2011

It may come as no surprise, considering last year's rising consumer anger at big banks, that the nation's credit unions had a banner year in 2011.

Total credit union membership grew to an estimated 94.2 million last year, a gain of 1.6 million, according to the Credit Union National Association. That's 2.7 times the 2010 increase.

Of course, many of those new members signed up late in the year, around the time of the grass-roots National Bank Transfer Day, a response to Bank of America's now rescinded plan to charge customers a $5 a month fee for making purchases with their debit cards. The CUNA statistics show credit unions added 900,000 members from September to November.

Unprecedented opportunity

"It's exciting to see so many Americans experiencing the benefits of credit union membership for the first time," said Dick Ensweiler, president and CEO of the Texas Credit Union League. "The last few months have provided credit unions with an unprecedented opportunity to talk about why our cooperative structure matters and give us a great platform to continue spreading the word.”

A credit union and bank perform many of the same functions but differ in one key aspect. A bank is a private, for-profit institution, and as such must show a return for their shareholders. Large, national banks are publicly traded companies and are subject to even more intense pressures from Wall Street.

Customers are shareholders

Credit unions are non-profit, membership cooperatives. That means its customers are actually it's shareholders. Any “profit” is returned to members in the form of more services and lower fees. Deposits in both types of institutions are federally insured up to $250,000.

Ensweiler pointed to Bank Transfer Day and overall consumer discontent with big banks in the persistent down economy as key reasons that credit union membership soared in 2011.

"More people are coming to realize that credit unions are the better choice," said Ensweiler. "I believe these membership gains are just the beginning."