So just how much bigger is Navy Federal than other U.S. credit unions?

Consider this. The National Credit Union Administration posted call report data recently that showed Navy Federal had nearly 13.8 million members at the end of the second quarter of 2024.

By comparison, the next five largest credit unions in the country by assets had roughly 10 million members combined at the end of the second quarter, according to a Tyfone analysis of the NCUA data.

So how is Navy FCU doing it?

Some of the $177.7 billion-asset institution’s fast growth can be attributed to a heavy dose of advertising.

Navy Federal spent $91 million in marketing and promotion so far this year, according to the NCUA data. The next closest credit union in terms of ad spending was Pentagon Federal Credit Union, at nearly $24 million.

The $56.5 billion-asset State Employees Credit Union, the nation’s second largest CU by assets, spent less than $1 million.

“Navy’s marketing efforts have been very effective in executing their military family strategy to add to membership totals, emphasizing that immediate family members of active or former military personnel are eligible. Navy Federal has, and continues to stay true to, a very well defined mission: providing financial services to current and former members of the military and their families.”

 – Jim Adkins
Managing Partner
Artisan Advisors

Navy Federal serves the Navy, Army, Marine Corps, Air Force, Coast Guard and Space Force and their families.

So unlike most other credit unions, Navy Federal also has access to a steady stream of new customers in the form of military recruits.

For example, new recruits for the U.S. Marines at Parris Island, South Carolina — where the credit union has a branch — are steered toward opening Navy Federal accounts and have their paychecks direct-deposited there during basic training.

“As Navy’s growth has been mostly organic, I attribute it to reaching those that either did not have banking services or increasing their market share with their membership. It is a rising tide, and Navy has consistently set the path.”

 – Geoff Bacino
Credit Union Consultant and Former NCUA Board Member

The growth numbers would not be as impressive if Navy Federal was finding growth through mergers or acquisitions, Bacino told Tyfone.

Total U.S. credit union membership increased by 2.8%, to 140.4 million, in the first quarter according to the NCUA. Comprehensive second-quarter data for the industry has not yet been released.

But membership growth is often a case of the haves and have-nots.

While credit unions with at least $10 billion in assets saw 5% year-over-year membership growth, those institutions between $50 million and $100 million in assets saw membership decline 5.4% during the past year.

Adkins said he expects Navy Federal’s growth rate to continue unabated over the next 12 months. Navy Federal’s product offerings are fairly standard, he said. But the combination of its “excellent” execution and strategic marketing will continue to drive growth.

Membership rose 5.7% during the year for credit unions between $1 billion and $10 billion of assets.

One of those, the $1.3 billion-asset Amplify Credit Union in Austin, Texas, saw membership fall 5% to more than 49,000 during the past year.

CEO Kendall Garrison told Tyfone the industry is seeing the same scale situation play out with Navy FCU that the banking industry has experienced with the money-center banks.

“The big get bigger faster than the rest of the market. We are competing with them in the mortgage space, but that’s about all.”

 – Kendall Garrison
CEO
Amplify Credit Union

Even a few of the largest credit unions in the country have had a hard time adding members lately. 

The $33.5 billion-asset PenFed actually saw membership fall by 20,000 – or 0.6% – year over year to 2.87 million in the second quarter.

Some industry observers believe that was due to the credit union pulling back from fintech-underwritten loans and PenFed subsequently losing those members.

On the positive side, First Technology Federal Credit Union experienced solid membership gains. The $16.7 billion-asset credit union actually outpaced Navy FCU on a percentage basis with 6.5% year-over-year growth to nearly 693,000 members.

The $19.6 billion-asset Mountain America Credit Union also had a strong year with 7.8% membership growth to 1.3 million members.

At the same time, the smaller credit unions are facing the same challenges as small community banks, Adkins said. “The cost of technology and the pace of digital innovation are proving to be major hurdles for smaller credit unions as they fight to stay relevant,” he said.