Recession Readiness Insights

Update on Credit Unions in Today’s Economy

Update on Credit Unions in Today’s Economy

April 03, 2023 | Olivia Voltaggio

Consumers have many choices for managing their finances. One option, banking, is often overlooked with a credit union. Credit unions are often able to offer low interest rates on loans and provide personalized customer service. Over time, this can save consumers money.

On our March Market Pulse webinar, “How Credit Unions Are Adapting to Economic Uncertainty,” panelists Rob Wescott, President of Keybridge; Tom O’Neill, Risk Advisor, Equifax; and Mike Schenk, Deputy Chief Advocacy Officer for Policy Analysis and Chief Economist, Credit Union National Association (CUNA), discussed how credit unions are growing deposits and supporting financial inclusion during today's economy.

Deposit growth in uncertain economy

During the webinar, Equifax Risk Advisor Tom O'Neill reviewed the Consumer Credit Trends data. He stated that credit unions have been increasing their deposits in the financial market, including mortgages, auto loans, and bank cards. Credit unions have been less affected by rising interest rates and home prices, which has led to a decline in mortgage originations. Credit unions have been able to maintain a consistent strategy, resulting in an increase in their share of new originations. Also, due to partnerships with dealerships and lower loan interest rates, credit unions have seen success in the auto market. As a result, credit unions now have 36% of new originations, compared to about 28% from the same period last year.

In the bank card market, credit unions have recently seen a strong recovery in new card trades. The credit union share tended to run counter to the market trends. O'Neill stated, "Credit unions are serving their members and are less likely to deviate from that strategy based upon market factors." The credit union share runs counter to the market. According to O'Neill, this means they are prioritizing serving their members over adjusting to existing market trends. These trends show the advantages of credit unions over commercial banks.

Credit unions and financial inclusion

Credit unions focus on access to affordable financial services for people of all income levels. They focus on financial education and community outreach programs promoting financial literacy, helping individuals achieve financial stability.

Credit unions also have a clear purpose to engage and support their community. This makes credit unions attractive to millennials and Gen Z consumers who value member ownership and social responsibility. Yet, according to CUNA Chief Economist Mike Schenk, there’s an awareness issue and it’s about making sure young people understand “the credit union difference.”

Credit unions have the opportunity to attract more members by differentiating themselves from traditional financial institutions. Credit unions do this by  personalizing their services and achieve greater community involvement. According to a recent CUNA survey, credit union members are twice as likely as non-members to believe that credit unions care about the local community. Credit unions have remained consistent in their approach to serving members, leading to their success in capturing shares of originations in various markets.

For more information on the latest Equifax Consumer Credit Trends and to register for future Market Pulse events, click here. If you missed our March 2023 Market Pulse webinar you can view the slides here or watch the recording here.


* The opinions, estimates and forecasts presented herein are for general information use only. This material is based upon information that we consider to be reliable, but we do not represent that it is accurate or complete. No person should consider distribution of this material as making any representation or warranty with respect to such material and should not rely upon it as such. Equifax does not assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice. The opinions, estimates, forecasts, and other views published herein represent the views of the presenters as of the date indicated and do not necessarily represent the views of Equifax or its management.

Olivia Voltaggio

Olivia Voltaggio

Senior Content Manager, US Information Solutions

Olivia joined Equifax in 2019. She graduated from the University of Illinois at Urbana-Champaign with a Bachelor of Science degree in advertising and a Bachelor of Arts degree in English. Olivia holds an Editing Certificate from the University of Chicago Graham School.