90 years after FCU Act signing, credit union mission is more important than ever

The Federal Credit Union Act was signed 90 years ago, but the most important thing about that number isn’t the milestone, instead it’s the journey it represents. Credit unions were founded to help those left behind, and Congress granted them powers in the Federal Credit Union Act while spelling out a mission to create “a source of credit for provident or productive purposes,” and credit unions continue to fulfill that mission to this day.

The act—and future credit union legislation—was an investment in communities, in people, and in the principle of cooperation.

Credit unions have served members through economic highs and lows, all unwavering in their commitment to putting the member first.

The last five years alone have been an incredible challenge as people still reel from the economic impact of a worldwide, once-in-a-lifetime pandemic.

But credit unions are at their best when things look their worst, and the pandemic is no exception. Look at the recent report from the Federal Reserve Bank of Philadelphia, which studied banking deserts since 2019.

These numbers show that banks—especially the biggest banks—cause a disproportionate amount of banking deserts, that is, closing the last branch in a census tract. The rate of bank branch closures has doubled since 2019, bringing along with it a 6% increase in census tracts designated as financial deserts.

In fact, banks with more than $10 billion in assets created 62% of new banking deserts, despite only having 45% of all bank and credit union branches.

Credit unions also have a disproportionate impact on banking deserts, because they punch above their weight when it comes to “curing” banking deserts, that is, opening a new branch in a census tract, providing safe and affordable services that weren’t there before.

Credit unions were responsible for “curing” financial deserts in 36% of all instances since 2019, despite only having 20% of total branches.

Credit unions reach people that for-profit banks aren’t interested in because they succeed when members succeed, and because it’s in their DNA to put people above profit.

The nine decades since the signing of the Federal Credit Union Act represents generations of members, families, and businesses that realized their financial dreams through a not-for-profit financial cooperative.

Credit unions have never lost sight of their mission, and to this day continue to advocate for expanded powers that will let them show new generations the power of the credit union difference.

No matter the source, the data is always clear: more access to credit unions means better financial futures.

Credit unions have fought for their members for more than 90 years, and will continue to be there for members, in good times and bad, because they continue to live out their mission.