I've had a feeling, over the last several months that something has shifted for the credit union movement-almost as if a new day has dawned.
But what is different, it seems to me, is not that the sun is rising, but that credit unions are. And the evidence is increasingly all around us.
Most striking is the relative health and strength of credit unions. Over the past three years, as other financials have struggled to maintain capital (some, even, taking government money to do so), credit union net worth was at or above 9.9%, well above the "well-capitalized" level of 7%.
At the end of 2011, credit union net worth reached 10.2% (nearly $100 billion), fed by net income that increased 41.2%.
Consumers get it about credit unions, too: More than 1.3 million (at least) joined credit unions last year. That's the best membership growth credit unions have posted since the Great Recession began in 2007.
What may be even more impressive is a good chunk of last year's membership growth-about 400,000 net-came in the fourth quarter, a period that typically shows overall net loss in membership. Bank Transfer Day-coupled with new tools such as aSmarterChoice.org, CUNA's comprehensive credit union locator-no doubt played a huge role in turning that trend on its head.
But the financials and membership numbers are just one part of the story. CUs have seen impressive gains in areas such as public perception, legislation, politics and more.
Fresh Territory
On the public perception side, credit unions are in fresh territory.
Each year, since 1998, CUNA conducts a poll of likely voters to gauge their perception of financial services in general, and credit unions in particular, as well as a number of other political questions.
This year's results were eye-opening.
For the first time, the survey showed that voters view credit unions and banks evenly in terms of the "best place for consumers to keep their day-to-day savings and checking account." For both credit unions and banks, 43% said it was the "best place" for them.
In past years, results were skewed in favor of banks. In 2008, for example, the breakdown was 61% banks and 40% credit unions; in 2004 it was 65% to 37%. These results, in our view, are a reflection of gains in consumer awareness credit unions have made in the wake of the now-rescinded Bank of America $5 debit fee and the publicity over Bank Transfer Day.
The latest survey also repeated something we've been seeing for some time: Consumers view banks as charging them too much.
In fact, 81% say the bank "charges too much for fees and services," but only 13% said the same of credit unions.
On the legislative side, we have also broken ground.
For the first time in nearly anyone's memory, Congress is considering two pieces of distinctly credit union legislation. That is: bills in both the Senate and House to expand business lending authority, and a House bill to give credit unions the option to raise secondary capital. Both would be tremendous steps forward for credit unions when they become law.
The Green Light
Meanwhile, our political strength is getting noticed, too. Late last year, when the House was holding a hearing on legislation to give bankers regulatory relief, we asked for-and received-a green light to voice our own views of the legislation.
In just about anyone's recollection, that's the first time credit unions have been given a seat at the table to weigh in on banker legislation. It wasn't just happenstance, but the result of long, careful work with lawmakers.
Bankers did not like the fact that we testified very much. And we don't oppose their bill. But we do think that Congress can and should consider all views when it comes to financial institution legislation, and its impact on the financial system.
So this is where credit unions are: We are financially strong and membership is growing. The public perceives us as equal to banks (which, they increasingly feel, is nickel-and-diming them with fees). We are aggressively pursuing legislative changes that will help us grow and become even stronger-and we have developed significant political support in Congress which wants to help credit unions accomplish that.
Time To Take Advantage
Yes, we have challenges. Banks continue to pound Congress about our tax exemption; we continually remind Congress why it remains vital to our industry's future, and continued service to consumers.
Nevertheless, there has been a shift-credit unions are on the rise.
At this year's CUNA Governmental Affairs Conference, I hope the more than 4,000 CU supporters keep that up front in their minds-and vow to build on it.
It's now up to all of us to harness our collective power and take advantage of this great opportunity that has arisen for us.
Bill Cheney is president and CEO of CUNA.
