2017 is proving to be a year of many uncertainties, and the United States economy is no exception. Though the nation’s economy has been steadily improving since 2011, the Great Recession is still fresh in public memory.
Furthermore, 2016 heralded dramatic upheavals in international political and economic norms. Regardless of your political opinion, we’re facing a brave new world, and many people are rightfully anxious about the direction of the nation’s economy. In the light, it’s worth highlighting the significant role credit unions have played in rejuvenating the economy and fostering further growth.
According to the National Association of Federal Credit Unions (NAFCU) via CUinsight.com, credit unions as a whole contribute over $10 billion to the economy every year. The figure speaks for itself, but a critic could say that every major industry contributes these kinds of figures to the national economy. That’s a fair point, but overlooks the variety of ways in which credit unions make wholly unique contributions to the economy as well.
For example, credit unions were some of the only institutions continuing to lend to small businesses throughout the recession. As the economy sunk and banks participated in the TARP bailout, it grew increasingly difficult for small businesses to get approved for loans. By continuing to lend money to small businesses, credit unions can take credit for a substantial chunk of economic development.
The trend continues today, as credit unions are still the primary institutions granting smaller loans. According to the NAFCU via CUinsight.com, over 85% of all small business loans from credit unions were less than $1 million. That figure is dramatically higher than those associated with other financial institutions.
Credit unions are also cited as an integral component of a sustainable economy. Considering national concerns over booms and busts, it’s hard to deny the value of diversity in the financial sector. At the 2012 Forum of the Association of Asian Confederation of Credit Unions (ACCU), the President of the International Cooperative Alliance (Dame Pauline Green) said the following on the subject:
“Buoyed by the knowledge that our sector most often only lends from its own deposits, and does not engage with the more risky financial ventures – across the world our deposits have risen, sometimes quite substantially, our asset base has grown, and most important for businesses and families, our lending volume has remain steady, and even grown, at the same time as the lending volumes of our High Street competitors has collapsed.”
Credit unions’ low fees and loan rates (along with high deposit interest rates) continue to drive the nation’s economic development. If you’re interested in learning more about IDS.com’s thoughts on the importance of credit unions, stay tuned for further blog topics on the subject or call us today at 1-844-437-3627.