Credit unions: a diverse subset of financial institutions

If there’s one thing you can say about all credit unions, it’s that they’re volunteer-run, democratically controlled, not-for-profit financial cooperatives.

That’s fundamental. It’s also where similarities end.

As it turns out, the credit union structure allows for a vast, diverse range of financial institutions, all of them working with their members’ best interest at heart.

Take Utah’s credit unions, for example.

There are 56 credit unions based in Utah. The smallest by assets, Presto Lewiston Employees in Cache Valley near the Utah/Idaho border, has 115 members, and assets of $389,920[1]. This means that if you own a typical house in Utah, you, individually or as married-filing-jointly, have a balance sheet larger than this credit union.[2]

The credit union serves the employees of the Presto Products plant and offers basic financial services: savings accounts, auto loans, personal loans. The credit union doesn’t offer any kind of retirement account, checking account, online access, credit cards, mortgage loan, or many other services. It’s as plain vanilla as it gets. It operates in the lunchroom of the plant, a few hours a week.

You’ve probably heard of the credit union at the other end of the spectrum: America First Credit Union. With $19.13 billion in assets, it’s 49,060 times larger than Presto Lewiston Employees. It serves 1,357,511 members in multiple states with 121 branches and a robust online and mobile presence. Just about any financial service you could want, you can get at America First, including investment services that America First can’t offer itself (due to regulatory restrictions), but that it partners with a third party to offer.

You cannot find two more different financial institutions than America First and Presto Lewiston. Yet, both operate under similar credit union charters—both are volunteer-run, democratically controlled, not-for-profit financial cooperatives.

So are the other 54 credit unions in Utah—all of them share the same cooperative structure, and the run the gamut in size, services, locations, and every other variable. To help you understand the diversity of Utah’s credit unions, here are some stats:

  • 31 Utah credit unions have assets of less than $100 million. You’ve probably never heard of many of these credit unions.
  • 7 Utah credit unions have assets of more than $1 billion (and 2 are close); these are probably the credit unions you’ve heard of.
  • 25 of Utah’s credit unions have only one location.
  • There are single-location credit unions all over the state: Logan, Roosevelt, Salt Lake City, Ogden, Morgan, Provo, Nephi, Manti, Richfield, Vernal, and more.
  • Utah’s credit unions serve from 115 (not a typo) to 1.357 million members.

Many of the smaller credit unions offer a limited range of services. In fact:

  • 12 of them don’t offer share draft accounts (checking accounts)
  • 10 don’t offer certificate accounts
  • 19 don’t offer money market accounts
  • 8 don’t have websites
  • 19 don’t carry credit cards on their balance sheets
  • 14 offer no type of real estate loan

This is not to say that those credit unions don’t offer value—of course they do! They provide great service and pricing on the products they do offer. Many members enjoy the intimate, small business feel of those tiny financial institutions, unlike anything available anywhere else.

It’s important to note that even the largest credit unions are small by bank standards. In fact, all of the credit unions in the country, combined, are smaller than each of the country’s four largest banks. All of Utah’s credit unions combined are only 62% the size of Utah’s largest consumer bank, Zions Bancorporation.

Part of what leads to those credit unions being so different is that each one serves a unique group of people. This group is called the “field of membership” and represents the people who are eligible to join the credit union.

When credit unions first started, their fields of membership were limited to small groups, such as common employers, churches, or towns. This was strictly a function of the limited technology of the time. It was easier to lend money to people you knew than people you didn’t know.

Over time, as technology improved the possibility of working with a broader group of people, and as many small business closed or moved away, many credit union field of memberships grew to be broader and more inclusive. Really, technology has allowed credit unions to broaden their reach, and benefit more people.

Today, credit unions have a diverse range of fields of membership. Some serve the residents of a county or city. Others still serve small groups of people working for the same employer. In Washington and Michigan, rules allow for a credit union to serve the entire state. Many credit unions serve multiple groups of people. In some cases, credit unions can serve people in both a geographical area, and others that belong to certain closed groups.

The credit union business model allows for a diverse range of financial institutions—from the very tiny to the robust and widespread. Every credit union has its own flair for products and members, and fulfills its own special niche.

All the while, they remain true to the volunteer-run, democratically controlled, not-for-profit structure that makes them unique from banks.


[1] All credit union financial information is from September 2023 Call Reports, furnished by NCUA.