The Big Story Blog

Are Minnesota credit unions benefitting from bank 'exodus'?

Posted at 11:38 AM on November 4, 2011 by Paul Tosto
Filed under: Banking, Economy

There's no doubt credit unions are the biggest beneficiaries of the current consumer push back against big banks.

Nationally, the credit union trade group says about 650,000 people and $4.5 billion in deposits have moved to credit unions since Sept. 29, when Bank of America unveiled plans for a$5 monthly debit card fee.

But are people really flocking to those non-profit institutions?

In Minnesota, at least, data show that while Minnesota-based credit unions have seen a decent bump in new accounts during the month, it isn't compensating for the decline in members they've seen the past few years.

MPR News reporter Martin Moylan got these Minnesota statistics from the Credit Union National Association.

creditunions222.jpg

Credit union officials say the membership decline the past few years is due to several factors, including the merger of Minnesota credit unions into those headquartered in other states.

So what's it been like for Minnesota institutions during the frenzy of the past month?

The association tells Moylan that between Sept. 29 and Nov. 2, roughly 10,200 new members joined Minnesota credit unions and deposited approximately $71 million. For context, deposits held by banks and credit unions in Minnesota totaled about $164 billion as of June.

So while there's clearly some positive flow in members and money toward credit unions, it's not much of an exodus from the banking industry, which will still control roughly 90 percent of the deposits in Minnesota, about the same as in 2007.


About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.

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