Americans Turn to Credit Unions in Times of Crisis

Many Americans have, and still are, struggling financially due to the financial fallout of the COVID pandemic. One source of relief that many people – ranging from the unemployed to those trying to keep their businesses afloat – have turned to is applying for a PPP loan. While banks pulled back on their lending operations, credit unions continued to lend throughout 2020.

According to a report from CNBC, between yearend 2019 and September 2020, credit union memberships increased by 3.37 million, or 2.8%, to 125.11 million. In terms of loan growth, portfolios at credit unions rose by 6.6% in that 12-month period, while banks saw 4.9% loan growth. While many people were able to get loans over the previous year at both banks and credit unions due to the low interest rates, credit unions did not stop offering loans and increased lending overall.

That wasn’t the only reason so many Americans turned to credit unions during the past year. Credit unions are more ‘personal’ in the way they do business. They are not-for-profits focused on the communities they serve. The people they serve and answer to as member-owners live and work on Main Street, not Wall Street. Their legal structure and mission-driven philosophy also keep credit unions from getting directly caught up in the volatile ups and downs of the stock market. The needs of the people and the community come first, which is why so many in America have turned to credit unions during difficult times.

Credit unions since their beginning in this country have been the place to turn to when financial crisis struck. The first credit unions opened their doors when the Great Depression caused many banks to fail, and they weren’t serving the average consumer anyway. Similar to now, during the Great Recession of 2008, banks pulled back on their loan offerings while credit unions did not. It was simply another day of continuing credit unions’ mission of ‘people helping people.’

Now in 2021, as the COVID vaccine rollout continues, the economy overall remains precarious. Many people don’t know when they will find employment again, and businesses wonder if they can keep their doors open. In this moment, credit unions have been the hope for many Americans, and after all of this is over, should we ever find ourselves in crisis again, credit unions will still be there to serve you and your community when you need them most.