This article was originally published on ChipFilson.com.
What would such an event mean for the coop system? Whether the termination of new coop charters was due to administrative policy, legislative chartering overhaul, or competitors’ making good on their legal challenges, what would credit union leaders say?
The reality is that those who might aspire for a coop charter will have no voice. The only persons with standing to oppose would be those who already have the benefits of a charter-the members, the employees, directors, and senior management. What would be your reaction?
Some possible responses
“No new charters are opening anyway, so how would this be any different?”
“Consolidation will just continue, so preserving charters is not a movement priority.”
“We’ll be okay, because we have plenty of capital. If necessary, we could even switch charters if the system atrophies.”
“Credit unions were created in a very different era with limited consumer choices. Now there are many options, including CDFI for underserved communities and low-cost FinTech options available to almost anyone.”
“We’d be disappointed. Credit unions have done much good. We still have our charter, though. I have more urgent priorities, keeping my credit union going, so this would not be a top issue for me.”
And finally, “I don’t like shutting the door for others, but what can I do about it? It’s not my problem.”
The credit union system’s new charter results
Denise Wymore, founder of CU De Novo Collective, reports the following new charter results from the past 8 years (2018-2025): Of the 20 total charters issued, 16 are still active, and 4 (or 20%) are closed.
The distribution by size: 7 are under $1.0 million in assets, 7 are between $1-$10 million, and two are over $10 million. At various times, the NCUA has reported having at least 90 new charter activities in various stages.
In the same eight years, the NCUA, in its 2025 Annual Report (page 165), shows 1,191 total mergers of which only 12 were assisted. That means most mergers are by credit unions with adequate capital ratios. Leadership chose to give up their generations-long charters.
A new charter survival rate of just two per year would not appear to be a viable response to the loss of independent credit union operations. By doing nothing about this charter drought, the industry is just accepting the reality of the headline—no new charters—but without any discussion or angst.
Why chartering matters
Two reasons. No new charters means the industry is dying. One can make all sorts of counterarguments, such as we have more members, more assets, more branches, while the average asset size increases to $570 million.
But it is not size, but rather the diversity and applicability of the charter to very different circumstances, that makes a coop charter so attractive. Credit unions were never intended to come from a common mold.
In most areas of human endeavor, one of the most powerful ties that bind is “local.” Coop power is unleashed when human beings show up for one another.
But the reality is that fewer and fewer communities have access to their own locally controlled and focused independent financial cooperative. Decisions about members’ savings, loan priorities, and even market presence are made elsewhere.
A dispersed financial operation over multiple states and different communities compromises one of the primary advantages of cooperative design. That does not mean credit unions cannot grow large; however, ever-increasing size requires careful thought to preserve the strengths of member-owned credit unions.
Secondly, there appears to be, from NCUA’s own tally and from reported activity in other financial charters, widespread interest in new financial startups. Certainly, there are multiple groups today that are interested in managing their own financial institution.
The problem may not be on the demand side but rather the “supply” process. That is the regulatory hurdles that require interested groups to invest years of volunteer time, energy, and expense with application steps, and then be given a start-up capital requirement before the charter is active. Just like a bank, only on a smaller scale.
Where is our future hope?
What if the next credit union revolution were to start on a campus? What if a new generation believed in the fundamentals of cooperative design so strongly that they were willing to devote their student years to founding a credit union? And then making it their legacy for all future students?
What if they were so motivated and capable that the facts above did not faze the group even a little? What might we learn, or re-learn, from their embrace of a cooperative solution for their community? With multiple online financial options available to students, why is a credit union charter needed?
The Carolina Students’ Credit Union is working to do just that, tailoring a new coop for their generation. I believe it can remind all of the need and ongoing appeal for owning and controlling one’s own financial institution. This is the group showing the way for the next generation of coop leadership. Will this new era be the start of the credit union story on a campus, versus a mill in Manchester, New Hampshire?
