When credit unions get bigger, what happens to the movement?

The UFCU and MSUFCU merger raises some uncomfortable questions about scale, identity, and the future of the cooperative model.

There was a time when the idea of a $13.5 billion credit union would have sounded almost contradictory. Credit unions were supposed to be the alternative to big banking, not another institution competing for a place among the financial giants. Yet here we are, watching University Federal Credit Union (UFCU) in Texas and Michigan State University Federal Credit Union (MSUFCU) announce a combination that will serve more than 850,000 members. That’s a lot of people sharing the cooperative philosophy, even if most of them probably just want their debit cards to work and their mobile deposits to clear.

The proposed merger, announced October 13, is significant beyond its size. According to the institutions’ joint announcement, the combined organization will retain its regional brands, operate under the University Federal Credit Union corporate name, and bring together two institutions with deep roots in higher education. MSUFCU’s April Clobes will become CEO, while UFCU’s Michael Crowl will serve as president. The combination is expected to be completed in summer 2027, subject to the necessary approvals. On paper, it’s an impressive arrangement. But as anyone who has participated in a strategic planning retreat knows, things tend to look particularly impressive on paper.

What interests me most isn’t the merger itself, but what it may signal about the next chapter of the credit union movement. We’ve spent decades explaining that bigger isn’t necessarily better, that relationships matter more than transactions, and that our cooperative structure makes us fundamentally different. Now we’re entering an era when the institutions making those arguments are becoming considerably larger themselves. Perhaps that’s progress or perhaps it’s necessity; but more likely, it’s a complicated combination of both.

Of course, there are compelling reasons for credit unions to pursue scale. Technology is expensive, cybersecurity threats don’t respect cooperative charters, and consumer expectations are increasingly shaped by financial technology companies with enormous budgets and an apparent willingness to redesign their apps every other Tuesday. The NCUA’s second-quarter 2026 data reported $2.50 trillion in federally insured credit union assets, up 5% year over year. The industry’s financial footprint continues to expand, even as the number of institutions declines. At the end of 2025, there were 4,287 federally insured credit unions, down from 4,455 a year earlier (a consistent trend over the past decade).

Consolidation is hardly a new phenomenon, but combinations of this magnitude make the trend difficult to ignore.

The university connection makes this merger particularly interesting, for me. Both institutions have built identities around higher education, where relationships are shaped by campus culture, institutional history, and communities that extend across generations. These aren’t simply attractive membership demographics but living ecosystems of students, faculty, staff, alumni, and retirees, each with different financial needs and expectations. Understanding those differences requires more than a centralized marketing strategy, sophisticated segmentation, and an enthusiastic email campaign featuring stock photography of smiling college students who appear to have never worried about tuition.

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A student at Michigan State and an employee at the University of Texas may need many of the same financial products, but the relationships that earn their trust aren’t necessarily interchangeable. Trust me, a credit union can preserve its name on a building while gradually losing the characteristics that made that name meaningful.

To their credit, UFCU and MSUFCU have committed to preserving their regional brands and maintaining local relationships. Their published merger information also emphasizes continuity for employees and members, expanded technological capabilities, and greater investment in financial education and community partnerships, which are all meaningful commitments. But maintaining separate brands is relatively easy compared with maintaining genuinely local decision-making and accountability. A logo can survive almost anything, yet I pose whether the culture behind it survives is another question entirely.

There’s also a broader industry issue worth considering. If credit unions increasingly consolidate into large regional and national institutions, what happens to the cooperative diversity that has historically distinguished the movement? Smaller credit unions have often been willing to serve specialized communities, experiment with unconventional ideas, and make decisions that might not fit neatly into a larger institution’s financial model. Certainly, smaller doesn’t automatically mean better. Anyone who has worked in this industry long enough knows that a small credit union can be just as bureaucratic as a large one, only with fewer conference rooms in which to discuss the bureaucracy.

Perhaps the most important question is whether we’re measuring success correctly. Asset growth, membership totals, and operating efficiencies matter, but they don’t tell us whether members are becoming financially healthier, whether employees feel empowered to serve their communities, or whether the cooperative difference is becoming more meaningful in people’s lives. The NCUA’s industry reporting provides valuable measures of institutional performance, but the movement also needs to keep asking what those numbers ultimately accomplish for members. A merger can improve financial ratios without necessarily improving the member experience. It can also create extraordinary opportunities to do both.

The UFCU and MSUFCU combination may become a powerful example of how credit unions use scale to strengthen their cooperative purpose. April Clobes captured that aspiration in the announcement when she said, “Growth isn’t about scale; it’s about value.” It’s a useful distinction, and one that deserves to become more than a memorable line in a press release. The real opportunity is to demonstrate that technology and personal relationships aren’t opposing forces, that regional identities can thrive within a larger institution, and that financial strength can translate into measurable improvements in members’ lives.

What concerns me isn’t that credit unions are getting bigger. It’s the possibility that we might eventually become so focused on competing with banks that we forget why we wanted to be different from them in the first place. We already have plenty of institutions capable of offering checking accounts, loans, and polished mobile applications. The world doesn’t particularly need another financial institution describing itself as innovative, member-focused, and committed to excellence. Those phrases have appeared in so many strategic plans that they should probably qualify for their own deposit insurance.

The future of the credit union movement shouldn’t be a choice between remaining small and becoming irrelevant or becoming large and losing our identity. We should be capable of something more imaginative. We should be building institutions financially strong enough to compete, technologically capable enough to innovate, and sufficiently connected to their communities that members can still feel the difference.

If this merger helps demonstrate how to accomplish that, it may become one of the more consequential developments in modern credit union history. Not because of the billions in assets or the hundreds of thousands of members, but because it could help answer a question the entire movement will eventually face. How big can we become without forgetting who we are?