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Members of the Senate Banking, Housing and Urban Affairs subcommittee listened to testimony Wednesday from experts who said banking mergers and subsequent branch closures have had "disastrous consequences" for communities and small businesses. CUNA officials stated there's an opportunity for credit unions to step in to help those communities if Congress would pass legislation to expand the field of membership rules.
The Director of Policy and Advocacy with the American Economic Liberties Project, Morgan Harper, testified that the consolidation of power and money the top banks have achieved over the years from mergers, acquisitions and branch closures has created an unfair banking system. "To put it bluntly: In recent decades, bank regulators have failed to enforce antitrust laws and these statutes in the banking sector, to the detriment of small businesses, consumers, entrepreneurs and the stability of our economy overall," Harper said.
In a letter filed by CUNA to the Senate subcommittee, President/CEO Jim Nussle noted that bank mergers have led to branch closures all across the U.S. with the number of bank branches falling from 96,292 in 2012, to 78,626 in 2022.
As Nussle's letter stated, the loss of thousands of bank branches come as the credit union industry has added 700 branches since December 2019. Credit unions currently have more than 21,000 branches nationwide.
While credit unions cannot compare to the scope of the number of bank branches, there is a way they can help fill the financial deserts created by bank branch closures: Change the field of membership law.
"Any serious discussion of policy remedies to address access to financial services in banking deserts and underserved communities must include modernizing laws and regulations which hinder credit unions from serving those the banks have left behind," Nussle wrote. "We continue to work with Members of Congress to introduce legislation expanding our field of membership. We strongly encourage the Senate Banking Committee to look into field of membership expansion today and in future committee hearing."
According to CUNA's estimates, the number of banking deserts has increased by 60% since 2012.
Nussle said, "The decrease in bank branches demonstrates bankers' profit over people approach to financial services. In contrast, the growth in credit union branches shows the commitment to providing services and being physically present in those communities as well. Credit unions will never apologize for our dedication to providing financial services and ensuring the financial well-being for all, including the financially vulnerable."
During testimony, Harper said, "Our banking system should be built around a commitment to an equitable and fair economic system. These were the principles that precipitated the passage of, and are reflected in, the Bank Merger laws. These principles should not change, nor has there been any reason to change them. America thrives with a robust and competitive banking sector, and Congress and this subcommittee has an opportunity to ensure that the American government lives up to that mandate."
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
