Credit unions have snatched up market share in credit cards, personal loans, mortgages and auto loans since the first quarter of 2015, though only about one in four Americans has done business with a credit union, according to Experian's 2017 State of Credit Unions report.
Attracting quality members
People who join credit unions tend to have better credit scores, as well as more credit cards, higher average credit card balances, fewer past-due bills and more total debt than people who don't belong to credit unions, according to Experian. Consumers with at least one credit union tradeline had a credit score of 701, compared to 665 for non-CU customers, the study found; CU customers also had 3.35 credit cards on average, compared to 2.9 for non-CU customers. Their average total debt was $31,626 compared to $20,820 for non-CU members.
However, even though there were over 5,700 credit unions in the United States at the end of the first quarter of 2017, Experian found that only 25% of Americans have one or more credit union tradelines in their credit files. That rate dropped to 20% for millennials and just 1% for members of Gen Z, who are currently seven to 21 years old.
State's evidence
Utah, Alaska, Idaho, Washington and Hawaii are havens for credit unions, with at least 38.2% of residents using credit unions in those states. Utah and Alaska had the highest concentrations, at 55.8% and 51.4%, respectively. Credit unions are still a novelty in many parts of America, however, with New Jersey, West Virginia, Arkansas, Mississippi and Kentucky all reporting concentrations below 18%. New Jersey was the lowest, at 10.8% in the first quarter of 2017.
A bigger bite of the personal loan market
Between the first quarter of 2015 and the first quarter of 2017, credit unions grew their market share in the personal loan market, from 24% to 26% of all originations. The market share for banks, on the other hand, shrank from 21% to 16% during that time. Online lenders and finance companies own the bulk of the market, however; they accounted for 44% of all personal loan originations in the first quarter of 2015 and 51% in the first quarter of 2017, according to Experian.
Big growth in credit cards
Banks still have virtually all the credit card origination market in the United States, though between 2015 and 2017 credit unions expanded their market share from 3% to 4%. Overall, card originations for credit unions shot up 18% between 2015 and 2017, and the industry now accounts for nearly $100 billion of total credit limits on new cards, according to Experian.
Setting up house in mortgages
Credit unions' share of the mortgage market more than doubled from 6% in the first quarter of 2015 to 13% in the first quarter of 2017, according to Experian. At least some of that growth appears to have come at the expense of banks, whose market share fell from 37% in 2015 to 33% in 2017.
Driving away with auto loan market share
Auto loan originations at credit unions surged 25% between the first quarter of 2015 and the first quarter of 2017. Credit unions originated 1.93 million loans and surpassed banks in terms of market share that quarter, and according to Experian, credit unions had 28% of the auto loan market. Banks and captive lenders each have 25%, and finance companies have 21%.
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