Are credit unions at risk in these times of banking crises?

Credit unions—mutual, cooperative, and tax-different—steer clear of traditional shareholder models.

They prioritize consumers, lending mostly to individuals rather than companies.

But will this shield them during a banking crisis?

Owned by their members, they operate as mutual or cooperative institutions. But how does this affect their vulnerability during financial downturns?

With a higher number of accounts and a consumer-driven approach, credit unions feel the impact of consumer-driven recessions.

But wait, there's more! (Cue the infomercial sound effects)

Their services cater to smaller transaction sizes and loans—auto loans, mortgages, personal loans, and student loans.

Will they bear the brunt more than banks with commercial deposits and loans?

Here's the twist!

As the United States faces a financial crisis impacting consumers, employment rates, and housing market instability, credit unions face unique challenges.

If the banking crisis and recession impact consumer confidence and consumption, credit unions will be disproportionately affected.

As we navigate through this financial storm, the exact impact on credit unions remains uncertain but there is one thing we can be certain of - impacts to the American consumer will disproportionately affect credit unions.

The unemployment rates and financial struggles of individuals across the country will be key factors to monitor.

Let’s keep an eye on credit quality metrics for the American consumer as a bellwether for the performance of credit unions.

--
Digging deep on banks is what I do.

🔔 Follow Brian on Linkedin: Brian Pillmore

Other Links:

• The Financial Industry’s Emerging Embrace of Open Source Banking
• I ran a bank.<br>But the most cash I’ve ever seen was $420k on 4/20/20 😏
• PacWest Moves to Boost Liquidity
• Regulators Urge Banks to Address Crypto Liquidity Risks
• Ever wonder how companies sell for 10X Book Value?