Aberdeen Proving Ground Federal Credit Union grew earnings from $16.3M in 2024 to $25.5M in 2025. That is a strong year. It is also one institution out of roughly 4,300 remaining credit unions, a number that has fallen 41% since 2010. The credit union sector's best individual performers are thriving inside a structure that is quietly hollowing out, and that structural erosion is the number most credit union advocates would rather you not focus on.
If you are deciding where to park your checking account, your emergency fund, or your next auto loan, I think big banks remain the better default for most people. Not because credit unions are bad. Because scale compounds, and credit unions are losing it.
The Popularity Trap
Credit unions enjoy a 73% favorability rating versus 56% for large national banks. They beat banks by 24 points on low-cost loans and 17 points on trust. These are real advantages, and they translate into real savings: lower fees, slightly higher savings yields, cheaper borrowing. A family refinancing a $25,000 auto loan might save $300 to $500 over the life of the loan at a credit union. That is not nothing.
But favorability is not the same as competitive position. Credit union executives themselves described the industry as being at an "inflection point" at their March 2026 conference in Washington, citing slowed member and deposit growth compared to the post-COVID period. The sector added over 90 consolidations in the past year alone. When an industry's leaders use the phrase "inflection point," they are usually describing a problem they have not yet solved.
Big banks, meanwhile, shed institutions too, dropping 32% since 2010 to about 4,400. The difference is that bank consolidation concentrates resources into fewer, larger entities with proprietary technology stacks, global payments infrastructure, and the capital to absorb regulatory shifts. Credit union consolidation often just means survival.
Fintech Partners Are Not the Same as Fintech
The MD|DC Credit Union Association announced partnerships with Curql Collective, MANTL, and SavvyMoney on April 7 to speed up account opening, improve fraud detection, and offer credit monitoring. Account opening now takes 5 minutes instead of 45. Good. But this is rented capability, not owned infrastructure.
The 500 largest credit unions are actively partnering with fintech firms through sandbox experiments and equity investments. I grant that this closes the digital gap faster than building in-house. The problem is dependency. When your competitive edge runs on someone else's platform, your margins are partially someone else's decision. JPMorgan spent over $15B on technology in 2024. Credit unions are buying seats at someone else's table.
Washington state's repeal of the credit union tax exemption earlier this year is a warning shot. That tax advantage has been a structural subsidy allowing credit unions to offer better rates. If other states follow, the rate differential narrows, and the main consumer argument for switching weakens with it.
Consider a practical scenario. You have $40,000 in savings and a checking account you use daily. A credit union might pay you 15 to 25 basis points more on savings, roughly $60 to $100 extra per year. That is real money. But if your credit union's mobile app cannot handle instant transfers, real-time fraud alerts, or seamless integration with payment platforms you already use, the friction costs you time and possibly security. Time has a price too.
The NCUA's deregulation push and the TruStage stablecoin partnership with Block Time Financial signal ambition. I respect ambition. But ambition funded by shrinking deposit growth and executed through third-party fintech is a different animal than ambition funded by $15B annual technology budgets and a captive customer base of tens of millions.
Credit unions serve their members well on price. On durability, on digital infrastructure, on the ability to absorb the next regulatory or economic shock, big banks hold the structural advantage. Popularity does not compound. Scale does. And 4,300 institutions heading toward 3,500 is not a growth story, no matter how good the loan rates are.
