Credit unions—and not just large financial institutions such as JPMorgan Chase and Bank of America—benefited from the recent collapse of some regional banks, Crain’s New York Business reported. In March, Signature Bank and Silicon Valley Bank both collapsed and were seized by regulators.
Deposits in credit unions grew by 2.7 percent in the first quarter of this year, compared to a 2.5 percent decline for U.S. banks, Crain's reported, citing the National Credit Union Administration (NCUA), a federal regulator.
“We have experienced continued growth in lending, along with increases in assets and insured shares,” said NCUA Chairman Todd Harper, using the industry term for customer deposits. “This is good news.”
Credit unions are member-owned nonprofits that hold 9 percent of the nation’s insured deposits. As of March 31, there were 4,712 federally insured credit unions with 136.6 million members, according to an NCUA report. Deposits are federally insured, as they are in banks.
One of the largest and oldest, Municipal Credit Union, has $4 billion in assets and serves 600,000 working New Yorkers, Crain’s reported. Its total loans reached $2.4 billion in the period ending March 31, a 3.3 percent increase over the fourth quarter of 2022, according to federal data. Deposits grew by 3.4 percent, or $150 million, to $3.9 billion.
“The credit union system currently remains well-capitalized, stable, and well-positioned to handle a relatively broad range of economic possibilities,” Harper told the U.S. House of Representatives’ Committee on Financial Services in May.