Why millions of Americans are now tapping credit unions for loans

When the state-mandated shutdowns started last March, Skyler Fort, a painting contractor in northern Michigan, turned to his local credit union, 4Front Credit Union, for a PPP loan.

Many Americans sought out loans in the past year, and Fort said he chose the credit union over a bank “based on the more personal feeling relationship.” Though he previously had bank relationships, he moved his accounts to the credit union, and in the end, the $55,000 PPP loan helped his business, Fortified Coatings, retain its five full-time employees and keep 14 additional contract workers as business revved up in the summer.

It’s not surprising that many Americans have received loans in the past year given record low interest rates, but research shows that credit unions tend to lend more than commercial banks during times of crisis. That’s because their mission is to support Main Street, unions and the local communities they serve. According to industry trade group Credit Union National Association, or CUNA, credit unions continued to lend and even increased lending during the Great Recession and current pandemic crisis. By comparison, banks have tended to pull back or even reduce lending during crises.

 

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