Jan 01 2001

An Analysis of Public Policy on Credit Union Select Employee Groups

This report evaluates the implications of the court ruling that a federally chartered credit union cannot serve more than one employee group. Because a credit union requires a sufficient number of members to be economically viable, the court’s ruling denies employees of small and medium sized companies access to federal credit unions. The total number of U.S. workers affected by this ruling is substantial: 62% of the employed labor force in the private sector works for firms employing fewer than 500 workers. On average, employees of small and mid-sized firms earn significantly lower wages and are much less likely to receive health and pension benefits than workers at large firms. Therefore, the court’s decision effectively reverses one of the purposes of the Federal Credit Union Act, which is to provide people of modest means access to a national system of credit cooperatives.