2 Hot Takes On Member Growth

Credit union membership growth in the United States is slowing dramatically, dropping to just 1.88% at mid-year 2025 — the lowest rate since 2011. This deceleration marks a pivotal moment for the industry, which must now confront shifting consumer preferences, rising competition, and economic headwinds.

NET NEW MEMBERS AND MEMBERSHIP GROWTH
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

After peaking in 2022 and 2023, with more than 5 million new members annually and growth rates exceeding 4%, net new members fell to 2.7 million, a steep decline from the post-COVID boom years when growth exceeded 4% and annual additions topped 5 million.

Several factors contribute to this slowdown. Higher interest rates, liquidity pressures, broader economic deceleration, and consumer expectations for digital-first experiences and personalized engagement have all strained operations. What’s more, indirect lending — once a reliable growth engine — has become a strategic liability. In mid-2023, indirect loans made up nearly 25% of all credit union lending, skewing focus away from core members. Many institutions are now recalibrating, pulling back from indirect channels to re-engage with their foundational membership.

The numbers tell a clear story: member growth at credit unions is no longer on autopilot. Unfortunately, data alone doesn’t chart a path forward. It does, however, underscore a critical inflection point that invites a deliberate rethinking of strategy. With that in mind, experts from Callahan & Associates discuss what credit unions can do — not just what’s happening now — to reignite growth, deepen engagement, and reinforce relevancy amid shifting member preferences.

TAKE 1: Purpose Is The New Growth Strategy

Growth is essential to long-term sustainability. Focus is essential to growth. But what should credit unions focus on? Life today is noisy and fast-paced. Consumers are bombarded with information and options. For financial cooperatives to rise above the noise and stand out — both critical for growth —they must return to their roots: their why, their purpose.

Purpose goes beyond products and services. It reflects a credit union’s commitment to improving members’ lives in meaningful and lasting ways. When a credit union clearly defines and communicates its purpose, it can build trust, loyalty, and emotional connection with current and potential members. Purpose becomes the springboard for growth.

Embedding purpose into culture and operations takes intentionality and patience. But when done well, it motivates and empowers employees to engage deeply — with one another and with members. Purpose-driven employees lean in. They show up. These authentic interactions create a flywheel effect, transforming members from passive recipients of services into active catalysts for growth.

When people feel seen, heard, and supported through shared values, they’re more likely to invite others to experience the same. Purpose turns members into advocates. It’s not just a branding tool — it’s a strategic asset that fuels sustainable, mission-aligned growth.

Katy Slater is a senior vice president at Callahan & Associates. When she’s not leading the firm’s initiatives to promote a positive culture and live out its value proposition, Katy is pushing the movement’s leaders to think more deeply about what it means to be a cooperative in today’s financial services industry. Learn more about Callahan’s consultants and its ground-breaking programs on Callahan.com.

TAKE 2: When Members Feel Cared For, Growth Follows

Is the dramatic drop in membership growth a cause for panic or an opportunity to ask, “Should we be counting new members as if they’re all the same?”

Data suggests at least a quarter of net new members in recent years are one-hit wonders sourced through indirect channels. They produce income to better serve core members, but they also confirm that all members are not the same.

As financial cooperatives, credit unions exist to make their members’ lives better through the delivery of financial products and services.  That’s the goal; growth of any sort is a lagging indicator that they are delivering on it. Except, delivering wellbeing is tough when your primary tools are indistinguishable commodities. Caring about members helps, but the hard truth is, caring doesn’t matter unless members feel cared for.

When members strongly agree their credit union looks out for their financial wellbeing, they become more loyal, use more products and services, and don’t cross-shop when they need something. Decades of Gallup research supports this, and it’s validated every day by research Callahan and Gallup conduct through the credit union consortium program we lead.

Making people feel cared for can power credit unions into the future, improving member financial wellbeing and credit union financial performance at the same time. If credit unions take this drop in membership growth as a wake-up call, then growth of all kinds will take care of itself.

Chris Howard is a senior vice president at Callahan & Associates. Chris works with industry-leading credit unions on purpose, financial health and wellbeing, data analytics, fintechs, and stakeholder impact. You can also find him moderating Callahan Executive Roundtables or consulting with any number of credit unions on topics ranging from strategy and governance to member engagement and ways to measure performance. Learn more about Callahan’s consultants and its ground-breaking programs on Callahan.com.