Banks continued cutting jobs in the second quarter, while credit union headcounts continued a years-long pattern of expansion, according to a report released Thursday.
The Kroll Bond Rating Agency found Call Reports showed banks cut their staff by 0.3% from March 31 to June 30.
“This marked the largest drop in a year, suggesting U.S. banks remain hesitant to resume consistent hiring,” the KBRA report said.
Banks had a small gain in employment from December to March – their first quarterly gain in two years. But since peaking in March 2023, banks have cut 74,650 full-time employees.
KBRA said the slowdown in hiring in the commercial banking business has coincided with broader labor market softness, as recent U.S. payroll data showed the weakest three-month period for job growth in the past five years through July.
Banks still employ about two million people full-time, about five times as many as the 348,000 people working at credit unions in June.
But unlike banks, credit unions have been adding jobs. The NCUA showed a March-to-June gain of about 1%, which KBRA said marked the fourth increase in the past five quarters.
“While banks appear to have contributed to the broader jobs slowdown, credit unions have shown greater resilience,” KBRA said.
KBRA said it has seen this bank-credit union divergence previously, saying it coincided with a period of rapid asset growth among credit unions compared to banks.
“A key factor potentially driving the expansion of credit union lending and hiring is the rate advantages offered by these institutions, particularly as the Fed aggressively tightened monetary policy in 2022-23," the report stated.
At one point in 2022, KBRA said credit union loans were growing at twice the pace of banks.
“While credit unions generally offer fewer products compared to commercial banks, they typically pay higher rates to depositors and offer lower rates to borrowers — a particularly attractive proposition when rates surge and consumers grow more sensitive to financing costs,” KBRA said.
NCUA data pulled from Callahan’s Peer Suite showed credit unions have been gaining full-time jobs in all but two of the quarters over the past 10 years.
The exceptions were a net drop of about 1,370 full-time jobs from March to June 2020, and a 410-job drop from December to March this year.
Overall, credit unions added about 102,000 jobs over the past 10 years, representing average growth of about 4.1% per year. But the pace of growth has slowed in the past two years. The change over the 12 months ending in June was 0.7% in 2024 and 1.5% in 2025.
Diving deeper into NCUA data also showed a similar pattern for full-time equivalent employment with full-time jobs increasing as part-time jobs have fallen.
Contact Jim DuPlessis at JDuPlessis@cutimes.com.
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