More than 210,000 residents now belong to one of the state’s 23 credit unions. That’s almost one in four residents.
Nationally, more than 100 million savers joined credit unions. That’s about one in three Americans.
The state’s credit unions vary from job-related unions like the Delaware State Police Federal Credit Union to community unions like DEXSTA, which started as the credit union for DuPont Experimental Station employees in 1937 but now welcomes all who live, work, worship or attend school in New Castle County.
The growth spurt for Delaware credit unions started with the 2008 banking crisis and was spurred by television pundits like Suze Orman and activists like Kristen Christian, who founded Bank Transfer Day in 2011 to urge people to take their money out of big banks.
The American Customer Satisfaction Index gave credit unions a score of 85 in 2014, compared with 76 for banks.
The index gave the credit unions a 93 for transaction speed and courtesy of staff, an 87 for variety of financial services available, and an 84 for competitiveness of rates. They gave banks an 86 for speed, an 88 for courtesy and helpfulness of staff, and a 71 for competitiveness of rates.
The credit-union score for number and location of branches was 71, while the banks’ was 75. The banks also were rated higher for number and location of ATMs—77 to 70.
Banks and credit unions have been long at odds over credit unions’ tax-exempt status as nonprofit entities. Banks argue that credit unions have morphed into tax-free banks, that more than 200 of them have over $1 billion in assets, and that their tax-exempt status gives them an unfair advantage. Credit unions maintain that the volunteer-based nature of credit unions would be morphed if the tax exemption in effect since the enactment of the 1934 Federal Credit Union Act were eliminated.
Patrick Mahaney, president of the Delaware Credit Union League, said his group will be seeking regulatory relief in 2015 as a result of the increased regulation that hit all financial institutions in the past decade.
“They are, in spirit, supposed to be minding the store, but, unfortunately, I think what’s happening here is we already had regulations, and they’ve just added another layer of complexity. Even though we’re not supposed to be a part of it, we just get swept up because we’re in the financial industry,” Mahaney said. “The burden on credit unions is just too many regulations. It overburdens them to the point where it actually costs dearly to be able to operate.
“We understand the need for auditing, but when it takes away from doing business and getting money into the marketplace, it’s going too far,” he said. “They just keep adding layers of regulation.”