Wednesday, June 9, 2010

The 90 Million Myth

What is the true number of credit union members in the United States?

NCUA reported that federally-insured credit unions had 90 million members. This number is arrived at by aggregating the total number of members of each credit union.

However, this number appears to be an overestimate.

The Credit Union Journal on January 24, 2008 reported that Jerry Marsh, a credit union consultant, said the actual number of credit union members is closer to 30 million, because “the so-called memberships that credit unions count represent duplicates, people who have memberships in two or three or more credit unions.”

Jerry Marsh’s estimate may be at the lower end of the range; but could accurately reflect the number of individuals that identify a credit union as their primary financial institution.

Using data from a 2004 Filene Study, Who Uses Credit Unions?, that found that 36 percent of households use credit unions – 8 percent of households only use a credit union, 12 percent primarily use a credit union, and 16 percent use a credit union, but their primary relationship is with a bank – then this would equate to about 42 million households using a credit union.

I suspect that the average number of household members using a credit union is below 2, maybe something between 1.25 and 1.5 household members. But this is strictly a guess, as I have not seen such a statistic.

This would suggest that the true number of credit union members is more likely in the range between 50 million and 60 million, not the 90 million reported by NCUA.


  1. If you represent other NCUA statistics as 100 percent accurate, then you should accept these in the same way. What "scientific evidence" do you have to prove them otherwise? Credit unions, Dr. Leggett, must state the accurate numbers of their members on their Call Reports otherwise, they would be guilty of a crime right? Just as banks must complete their Call Reports under the same certification? How would credit union leaders find out the true number of consumers served by any specific bank? We would have to rely upon such numbers provided by the bank as truth. Please!!! Can we go back to discussing important issues!

  2. This is relevant, because the credit union industry and its regulator continue to trot out this number.

    While I agree each individual credit union's number is correct, it is not correct in aggregate.

  3. Credit unions indeed have 90 million members. This is not the same as saying that 90 million people belong to credit unions. I'm not surprised you can't tell the difference.

    Very intelligent post though. In disputing the number, you quote an obscure "credit union consultant" from a magazine article that is two and one-half years old. You substantiate your revised calculation by "suspect(ing) that the average number of household members using a credit union is....." Hmmmmmm. Are you sure you're an economist?

  4. Mervin:

    I'm glad to see that you agree with me that the number of people belonging to credit unions is less than 90 million. That is progress.

    I clearly stated my assumptions. I admit that I had to make a guess about the average number of household members belonging to a credit union. But I felt reasonably confident in this guess based upon Census Bureau data that reports that the average number of persons per household is 2.56 in 2008.

    You may disagree with this assumption. But what evidence do you have that says my assumption is wrong.

  5. The Keith Leggett Myth

    Credit unions generally report “primary” members, not an absolute count. Primary members are those eligible to participate because of their affinity with the institution’s field of membership. There can be and often are sub-member accounts such as a separate member spouse account or multiple children accounts underneath the primary member. Therefore, the absolute number of accounts could be greater than 90 million, less than 90 million because of regulatory reporting methodologies, or exactly 90 million.

    Evidentiary validation: If the number were substantially less than 90 million you wouldn’t have a job because credit unions’ would pose too small a threat to the profit motives of ABA’s banks. If the number were substantially greater, there would be two of you. 90 million is just fine. So is just one mythical Keith Leggitt.

  6. Thank you to my anonymous friend above for your insightful and funny dismissal of the mythical Keith Leggett. When he's not cutting and pasting some pointless statistics, he's guessing about the mission and motives of the credit union community. There is no basis or reason to consider his posts since his own motives are so obvious and suspect.



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