Competition
A new national survey of community banks has undercut longstanding claims by banking trade groups that credit unions pose a growing competitive threat. According to the Conference of State Bank Supervisors (CSBS) Annual Survey of Community Banks, community banks overwhelmingly identify large banks and other community banks as their primary competitors, not credit unions.
The findings directly contradict rhetoric frequently used by community bank trade associations in lobbying efforts, which often accuse credit unions of “creeping into their space.”
“It’s the height of hypocrisy,” Jim Nussle, president/CEO of America’s Credit Unions, said. “Community banks tell Congress that credit unions are a threat, while telling regulators that they’re not even on their radar.
“Credit unions don’t compete for profits, they compete for people. They serve Main Street families, small businesses, and rural communities that Wall Street ignores and community banks can’t always reach.”
The CSBS survey highlighted that community banks are feeling the most competitive pressure from industry consolidation and the largest financial institutions, which continue to dominate market share in key areas such as digital banking and payments. Nonbank fintech providers are also emerging as fast-growing rivals, especially in payment services.
Credit unions were not called out as a distinct competitive category in the survey’s data or charts, further reinforcing that they are not a primary concern for community banks in their regulatory assessments.
“The survey results make it clear: Credit unions are not the problem,” America’s Credit Unions said in a statement. “What community banks told their regulators: Credit unions aren’t their competition.”
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