Credit Unions Shed Branches for First Times Since Late 2021
NCUA data shows most Q2 losses were in the Northeast, but states from California to Louisiana contribute to the drop.
NCUA data showed the number of credit union branches fell from March to June, the first quarterly drop since 2021’s fourth quarter.
Credit unions had 21,914 branches, headquarters and other locations on June 30 — 14 less than they had three months earlier, according to a CU Times analysis of NCUA data.
Generally, credit unions lost a large number of branches during the Covid-19 pandemic, and have been building back their net count since then. Bank branches had already been falling before the pandemic, and have continued to dwindle.
Credit unions lost 449 branches from December 2019 to December 2020, and then gained 362 through March.
The second-quarter net loss was small (0.1%), but pushed credit unions further from recovery to the 2019 peak. The losses were concentrated in the Northeast, West and Texas-Louisiana areas:
- The Northeast Census region had 3,552 branches on June 30, down 25 from March. It lost 87 branches (-2.3%) from December 2019 to December 2020, and since then has lost another 129 (-3.5%). Pennsylvania, Massachusetts and New York each lost seven branches.
- The Midwest had 5,577 branches, 18 more than March. It lost 96 branches (-1.7%) in 2020, and since then has gained 91 (1.7%). Michigan and Wisconsin each gained eight branches.
- The South had 7,928 branches, two fewer than March. It lost 159 branches (-2%) in 2020, and since then has gained 215 (2.8%). Georgia and Florida each gained eight branches; Texas and Louisiana each lost seven. Smaller losses from Delaware, North Carolina, North Dakota, Virginia, Mississippi, West Virginia and Oklahoma contributed to the region’s net loss.
- The West had 4,806 branches, five fewer than March. It lost 106 branches (-2.2%) in 2020, and since then has gained 171 (3.7%). California and Arizona each lost seven, buffered by gains mostly from Utah, Colorado and Oregon.
The Northeast’s second-quarter losses included one branch closed in May in North Haven, Conn., by Nutmeg State Financial Credit Union of Hartford, Conn. ($702 million in assets, 51,578 members).
The Connecticut Department of Banking reported Sept. 13 that Nutmeg State plans to close two more branches Nov. 15: Milford, which opened in 2018, and Norwalk, which opened in 2021.
All three were “DMV Express” locations with credit union employees renewing licenses and performing other services for the state Department of Motor Vehicles.
President/CEO John Holt told CU Times Thursday that the credit union received an $8 fee from the DMV for each customer who was not a credit union member, but that wasn’t the purpose.
“The goal was to bring in a lot of traffic to then build relationships with those people,” Holt said.
However, traffic fell 70% and the branches became unprofitable after the DMV improved its online services in the wake of the pandemic, allowing drivers to perform many services online that previously had to be done in person.
The DMV services have been or will be moved to nearby branches, Holt said.
Nutmeg State added two branches in Bristol, 10 miles southwest of Hartford, with its June 1 acquisition of First Bristol Federal Credit Union, which had $107 million in assets and 5,687 members on March 31.
The credit union also said it has plans to add new branches in underserved parts of the state, but that it is also investing in technology so it can support members anywhere in the country without a branch.
Nutmeg State’s geographical membership includes about half of Connecticut. In January, the credit union expanded its field of membership by affiliating with two organizations: The AAA Club Alliance, which covers 13 states, and the nationwide Community Impact Fund.
The link with the AAA Club Alliance allowed the credit union to draw in 1,300 new members and $20 million in loans from Missouri, Kansas and Oklahoma from January through July.
And, he said he is in talks for other possible mergers.
“I would love to see us get to a billion dollars before the end of next year,” he said.