WASHINGTON (4/11/12)--Bill Myers, director of the National Credit Union Administration's (NCUA) Office of Small Credit Union Initiatives, discussed credit unions' benefits to consumers, and more complex issues facing small credit unions in a recent MarketWatch interview.
In a question-and-answer format, Myers said "the cool thing about most credit unions" is their service to small communities, including churches and employees of certain businesses that need tailored financial service offerings. "Depending on what little niche you fit into, there's a credit union for you," he said.
The NCUA official highlighted the fact that credit unions serve individual communities, and as such, "did not get caught up in some of the complex financial practices of the recent bank bust."
Most credit unions don't have the complex financial products a bank has to offer; that is a strength in terms of safety, even if they don't earn as much income as a result, he said.
When asked if lower income levels were a concern, Myers responded, "Well, first, credit unions are member-owned, and don't have to produce profits or please anxious shareholders. But second, and more to the point, not having complex products does hurt the funding, and also causes some customers to drift away.
"It's especially hard on small credit unions, which are closing or merging at a significant pace: in 1979 there were 22,000, and now there are 7,100 credit unions in the U.S."
However, Myers also noted during the interview that many credit unions are finding their membership increasing as new members that do not trust big banks move to the safety of credit unions.