Great Lakes Fills a Banking Desert in Chicago

Great Lakes Credit Union based in Chicago’s North Shore has opened a branch on Chicago’s West Side, eliminating a banking desert.

A study published in February by the Federal Reserve Bank of Philadelphia showed credit unions are much more likely to eliminate banking deserts than banks, which are more likely to create them.

Great Lakes Credit Union of Bannockburn, Ill. ($1.4 billion in assets, 81,140 members) opened a branch Wednesday in a Chicago’s Austin neighborhood. A news release from the credit union said that Austin residents previously relied on currency exchanges and predatory payday lenders in the neighborhood, or had to travel to outside their community for financial services.

The new branch is called the Leaders Network Financial branch after The Leaders Network, a group of multicultural, interfaith and community leaders.

The network worked with the Illinois Credit Union League to identify the most sustainable way to bring a financial institution to Austin.

The league introduced the network to Great Lakes Credit Union. In late 2022, the two organizations entered into a partnership agreement to bring a credit union to Austin. The Leaders Network said it chose to partner with the credit union because of their shared values and focus on financial empowerment and community development.

“This is the beginning of our journey to financial freedom on the West Side of Chicago,” David Cherry, president of The Leaders Network said.

“The branch is a beacon of hope for our community,” Pastor Ira Acree, a co-founder of The Leaders Network, said. “It will provide economic opportunity for all, regardless of background.”

NCUA data showed Great Lakes Credit Union had 15 branches and other locations as of March 31.

According to the Federal Reserve Bank of Philadelphia, 4% of census tracts in the United States last year were banking deserts and 4% could become a desert if a branch closes.

Curt Long, deputy chief economist for America’s Credit Unions, cited the study published by the Philadelphia Fed that showed while credit unions account for only 21% of banking branches, they accounted for 36% of tracts where banking deserts were eliminated by the opening of a branch.

“It’s clear that credit unions are doing more than any other type of depository institution to address the need for financial services in census tracts that other institutions are abandoning,” Long said in a June “Economic Insights” video.

The Philadelphia Fed study by Alaina Barca and Harry Hou found that from 2019 to 2023 banks closed 5,399 branches, or 7.0% of the 76,933 branches they had in 2019.

Credit unions had 19,157 branches in 2023, only 14 fewer than in 2019, or a 0.1% drop.

Meanwhile, the number of banking deserts increased by 217, and the number of Americans living in banking deserts grew by 760,000.

NCUA data, which includes headquarters and operations centers, showed credit unions had 21,911 locations as of Dec. 31. Credit unions lost 449 branches from December 2019 to December 2020 during the height of the COVID-19 pandemic, and gained 345 branches from December 2020 to December 2023. They added another 17 locations in the first quarter.