Small Market Credit Unions May Have Greater Impact on Field of Membership

By Michael Cochrum

In the world of credit unions, as with banks, the larger shops tend to garner more attention from industry insiders.  However, it may be that smaller, small-market credit unions are garnering more attention from the members they serve.  CUBI.Pro recently used its national CU Peer Data Application  to research how credit union assets were distributed by state and  by individuals in each state.  The research demonstrates that credit unions in the most populous states garner the largest concentrations of assets but do not necessarily impact individuals in those states as much as credit unions in states where the population is less dense.

Obviously, large credit unions are often able to offer more services and access points to their members than smaller credit unions, due to scale, but the question that arises is whether these services are what members and potential members are seeking in every area the credit union serves?  Another question is whether the presence of in-market competition has a greater impact on credit unions in metropolitan areas than in smaller markets where competitors are fewer.  While the research findings below do not fully answer these questions, they do expose, perhaps, an untold story of the credit union movement; small, member-centric financial cooperatives still play an important roll in the lives of many small-market consumers.

The heat map below illustrates the concentration of almost $1.5 Trillion in U.S. credit union assets by state, with lighter-colored states having lower concentrations and darker-colored states having higher concentrations.  As one can see, California in blue, holds more credit union assets than any other state, by far, with $199 Billion in assets at the end of 2018.  Virginia is second with just over $155 Billion. Then Texas with $104 Billion and New York with around $80 Billion.  This should be no surprise as these are states with relatively high population concentrations.  The least populated states, often referred to as the “fly-over” states, represent the smallest share of asset distribution.

However, as illustrated in the map below, when one compares total credit union assets in a state with that state’s adult population reported by the Census Bureau, a much different picture emerges.  Virginia credit unions have the highest assets per capita with over $18,000 in assets per person, but this includes Pentagon Federal Credit Union which is disproportionately large. Alaska credit unions, with a total population under one million, hold over $15,000 per capita.  The average U.S. credit union per capita assets are around $4,500 per adult for comparison.

We find states like Maine($5.98), New Hampshire($6.21), Vermont($7.00) and Massachusetts($5.79), all well above the national average, edging out New York($4.37) on per capita assets.  Idaho($5.69), Wyoming($5.85), New Mexico($5.36) and Utah($9.16) all give California($5.06) a run for its money, literally.  Texas, with a high concentration of credit union assets overall, falls short of the per capita average at only $3600 per adult.

While this research does not go so far as to say that the size of an individual credit union does not matter, it seems quite clear that credit unions thrive, individually, in markets with less dense populations and perhaps a lower concentration of financial service providers representing fewer choices for consumers.  It also seems to indicate that credit unions would do better to expand in under-served areas of the country rather than into areas that are already served by other credit unions and banks.

There are two potential take-aways from this analysis.  The first thing to understand is that as credit unions consolidate for efficiency, it is important to not dismiss the value of touch points in smaller communities where there are fewer competitors and that services provided may need to be tailored for the needs of people living in disparate geographic locations.  In other words, one cannot assume that members acquired through a merger with another credit union will easily adopt the surviving credit union’s service delivery methods, nor should we assume that a touch point that works for urban members will appeal to rural members. 

The second thing to consider is, for credit unions seeking organic growth, smaller, more rural, communities may present opportunities that may not have been considered.  Often, when looking at locations for expansion, we look where our competitors are successfully doing business and stake a claim nearby, lest they steal our existing members.  However, an equally important strategy may be to pioneer new, underserved, service areas where your competitors have yet to stake a claim.

CUBI.Pro works with credit unions across the country to support a data-driven decision culture and provide meaningful business intelligence that allows CU leaders to make better and more timely business decisions.  If your credit union is looking to enhance its business intelligence for decision making, visit for more information or email


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