MADISON, Wis.–Credit unions in Wisconsin may soon surpass banks when it comes to assets, according to a new report.
Credit unions in the Badger State held $66 billion in total assets at the end of 2024, up $1.9 billion from the previous year, according to data from the Wisconsin Department of Financial Institutions. The state’s banks closed the year with $70 billion, according to the Capitol Times.
The Capitol Times cited a report from the financial consulting firm Wipfli that forecasts continued growth in the credit union sector, with 96% of credit unions expecting to grow in the next year and over half predicting asset growth of 5% or more.
Kim Sponem, the CEO of Summit Credit Union in Cottage Grove, Wis, told the Capitol Times credit unions are growing due to their structure as not-for-profit financial institutions and the value they return.
“Unlike banks, we are owned by members, not shareholders. That means our income is returned directly to our members in a variety of ways, so we do not pay income taxes. This translates to significant value,” Sponem said in a statement.
What Members Have Saved
Sponem estimated Summit’s members saved more than $64 million last year by choosing the credit union over an average Wisconsin bank, roughly saving $1,200 per household, the Cap Times said.
In addition, Sponem said that although credit unions don’t pay federal income tax on profits, credit unions account for more than $36 billion in local, state and federal taxes and fees each year, and provide $38 billion in financial benefits to families nationwide.
Similarly, Paul Kundert, CEO of the $6-billion UW Credit Union, which is adding about $1 billion in assets every three years, told the Capitol Times, “Credit unions have to earn money and invest in growth. Our growth is a function of the number of members we serve, and we’re really proud that when we acquire accounts, we tend to keep them.”
Banks Express Concerns
Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association, told the Capitol Times she is concerned about a shrinking number of banks in the state, due in part to acquisitions — including some by credit unions such as Summit CU, which acquired Commerce State Bank three years ago.
At least seven similar acquisitions have taken place in the state since 2014, the Cap Times reported.
“It just means, frankly, the rest of the business community, as well as individuals, have to pick up the tax gap when that happens,” Oswald Poels was quoted as saying.
6 of 10 Largest are CUs
According to a Wisconsin Bankers Association report, six of Wisconsin’s 10 largest financial institutions were credit unions as of May 2022, and 14 credit unions had assets of $1 billion or more.
Because credit unions are exempt from paying income taxes, Oswald Poels told the Capitol Times credit unions benefit from a pricing advantage over banks of nearly 40%, which “she argued has been a major factor in their growth.”