America’s Credit Unions has shared its latest research on how the sector serves “people banks leave behind”.
Curt Long, chief economist of the apex body, shared recent data comparing credit union and bank services to households with varying income and net worth during a Governmental Affairs Conference breakout session Tuesday.
“It’s pretty clear there’s sort of a sweet spot for credit unions: below median income and net worth,” he said. “These are people who are, by definition, of modest means.
“Then on the bank side, it’s true that they serve some low-income households, but among those low-income households, they’re primarily serving high-net-worth households. And on the other side, yes, they do serve some low-net-worth households, but those tend to be high-income.”
Quoted in a report on the America’s Credit Unions website, Long added: “So, it’s either one or the other, while credit unions are fulfilling their mission of serving people of modest means, people who, you know, banks are really not interested in servicing.”
Senior economist Dawit Kebede said the forecast looks relatively positive, with the economy growing, a steady labour market, and retreating inflation. But he warned that world events may lead to additional uncertainty.
Analyzing the credit union difference, he said that a consumer receiving a US$40,000 loan over six years from a credit union saves $15,000 over the life of the loan, compared to auto finance companies, and $10,000 compared to banks.
“Credit unions remain a trusted partner of members throughout any kind of monetary policy,” he said.
The Data and Tools section of America’s Credit Unions’ website contains the data covered in the presentation, as well as bank comparisons, economic forecasts, and other figures.
