Billionaires Club Ranks Continue Growing

WEST PALM BEACH, Fla. – The growing ranks of credit unions boasting $1 billion or more in assets meant it was no problem in 2005 to find candidates for Credit Union Times’ Billionaires Club. By mid-year the count had risen to 104. Many people would argue economies of scale can indeed benefit members by allowing larger credit unions to offer increasingly sophisticated services and at the same time trim costs. But it appeared folks in the credit union industry weren’t the only ones noticing the growth in the Billionaires Club membership list. Bankers renewed their attacks, stressing that credit unions are no longer small financial institutions run by a treasurer toting the assets in a cashbox. CUNA struck back. In a Congressional Briefing Paper issued in October, the association cited the fact that from 1992 to 2004 credit unions’ market share has stayed at 6% of total assets. “The annual growth of credit unions pales in comparison to that of banks, which in 2004 alone grew by $812 billion – more than 1.2 times the total assets of credit unions,” CUNA declared. “Credit unions have never needed a taxpayer bailout, have higher capital levels than banks, and have consistently weathered economic downturns – even the Great Depression – with very few failures.” Other credit union national groups, state leagues and individual credit unions joined in. For example, the National Federation of Community Development Credit Unions wrote to the House Committee on Ways and Means. The letter specifically defended large credit unions. “During the past several years, the federation has been encouraged by the growing engagement of `large’ credit unions in servicing low-income communities,” NFCDCU Executive Director Clifford Rosenthal wrote. -