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Troubles With Canada’s Credit Union System …Is The US Next?

Thursday, May 16, 2013 - 7:37 AM
There are many similarities in the ways that Canadian and U.S. credit union systems have evolved, and the issues they now face: member growth, an aging membership, loss of special tax status… and big credit unions get bigger while small ones struggle for survival. But the impact of these issues seems to be more pronounced in Canadian credit unions.

Should credit unions in the U.S. interpret the turmoil in the Canadian credit union industry as an accelerated and exaggerated prophecy for rough times ahead? Is Canada foreshadowing the future for American credit unions?

Troubles With Canada’s Credit Union System …Is The US Next? | The Financial Brand: Marketing Insights for Banks & Credit Unions
4
ShorebreakShorebreak2,362 posts since
Apr 6, 2010
Rep Points: 12,562
1. Thursday, May 16, 2013 - 10:55 AM
If credit unions lose their special tax status won't that cause them to have to lower interest rates for savers?  They will lose their edge they now have over banks.  I hope it doesn't happen here because I like having another choice besides banks for my CDs.
1
paoli2paoli21,135 posts since
Aug 10, 2011
Rep Points: 5,068
2. Thursday, May 16, 2013 - 11:17 AM
They wouldn't necessarily have to lower rates.  They would most likely gain other methods for obtaining capital and be free to invest in other vehicles that banks can. Whether that is a good thing would certainly be up to debate.

Although there are numerous credit unions that operate as intended there are also numerous large credit unions that really seem to be more like a bank.  There was a thread here (yesterday, I think) about California being frustrated with some credit unions that advertise membership for everyone.  National membership was never intended for credit unions. 

If they do lose their tax exempt status, they only have themselves to blame.  They gave too much ammunititon to their bank "friends".

cd :O)
3
ChrisCDChrisCD66 posts since
Nov 18, 2010
Rep Points: 409
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