Credit unions spend a lot of time and millions of marketing dollars touting their commitment to their members and to the greater cooperative good. “For people, not profit” is so ubiquitous a saying among the promoters that it is nearly as over-used as giant credit union PenFed’s “great rates for everyone” commercial jingle. If you’ve heard it once you’ve heard it a million times.
Unfortunately, when it comes to truly helping their members when they need it most during a pandemic and massive economic displacement, credit unions are failing to live up to their missions. The Payroll Protection Program (PPP) is a desperately needed lifeline for small business owners and self-employed Americans who’ve seen their incomes plummet, if not simply disappear entirely over the past four months.
And yet, credit unions are failing to even consider making these government-backed, risk-free loans to their members. Less than two percent of the PPP funds, which supported 51 million American jobs during a time of intensive crisis, were distributed by credit unions through June 30.
And it’s not just the biggest, most bank-like credit unions that are dropping the ball on PPP — although PenFed, Wings, Golden1 and other multi-billion-dollar credit unions have all demonstrated a serious lack of leadership on the issue. Thousands of credit unions with under $1 billion in assets also failed to act.
The numbers are shocking. While 85 percent of America’s 5,100 banks have participated in the program so far, less than 18 percent of the nation’s five thousand credit unions have taken part.
That’s hardly an example of an industry coming together during a time of national need. It’s even more remarkable when you consider that the industry is currently lobbying to expand credit unions’ business lending authority. Why do they need more authority when they aren’t even using what they have?
Playing possum when it comes to helping America’s small businesses is not acceptable. Credit unions should live up to their credo and show us all that their words have meaning and truth and aren’t just fancy double talk from a team of marketing experts.
Now that the federal government has extended the program, it’s time for credit unions to step up. Their members need them.