The History of Credit Unions Offering Investment Services

By Mart Vos, CEO, Eko

Credit unions have long been known for their focus on member service, financial empowerment, and community-oriented banking, but their journey into investment services has been more gradual. Historically, credit unions prioritized traditional banking services like savings accounts and loans, but over time, they expanded their offerings to include investment products. Below is a historical overview of how credit unions began offering investment services and how this has evolved.

Early 20th Century – A Savings and Lending Model

Credit unions were founded on the principle of cooperative banking, designed to provide affordable credit to their members. The first U.S. credit union, St. Mary’s Bank (founded in 1908 in New Hampshire), focused on savings deposits and small loans. Investments were not part of the model, as most credit unions were small, member-owned, and heavily regulated.

1970s – The Growth of Credit Unions and First Investment Offerings

As credit unions grew in size and membership, many began exploring investment-related services, primarily through share certificates (similar to CDs) and limited trust services. However, strict regulations under the Federal Credit Union Act (1934) limited their ability to offer full-scale investment products.

During this period, some credit unions partnered with external brokerage firms to allow members to access mutual funds, annuities, and investment education, but these services were not integrated into the credit union’s core offerings.

1980s – Expansion Through CUSOs (Credit Union Service Organizations)

The 1980s saw the emergence of CUSOs (Credit Union Service Organizations), which allowed credit unions to jointly offer financial services, including investments. By pooling resources, credit unions could now offer members access to retirement accounts, mutual funds, and financial planning services.

CUSOs played a crucial role in expanding investment services without violating credit union charters. Examples of early investment-focused CUSOs include CUNA Mutual Group, which provided insurance and investment solutions tailored to credit unions and their members.

1990s – Regulatory Changes and the Introduction of Wealth Management

The Financial Modernization Act (Gramm-Leach-Bliley Act, 1999) removed many restrictions on financial institutions, allowing credit unions to compete more directly with banks in investment services.

During this time, credit unions began offering:

• Brokerage services through partnerships with firms like LPL Financial and CUNA Mutual
• Investment advisory services to help members plan for retirement and wealth building
• IRAs and 401(k) rollovers, making credit unions more competitive with banks in wealth management

Larger credit unions started hiring dedicated financial advisors to provide investment advice directly to members.

2000s – The Digital Shift and Growing Competition

With the rise of online investing and fintechs, credit unions faced increasing competition from banks and independent robo-advisors. To stay competitive, many credit unions:

• Partnered with digital brokerage platforms to offer investing
• Expanded financial planning and wealth management divisions
• Focused on fiduciary advice rather than commission-based product sales

This period saw a shift from transaction-based investment sales to holistic financial planning, with an emphasis on helping members build long-term wealth.

2010s – The Emergence of White-Label Digital Investing

The rise of robo-advisors and embedded investing solutions led credit unions to seek seamless, digital-first investment offerings. Many credit unions:

• Integrated investing within their mobile banking apps to improve member engagement
• Used white-label digital investment platforms (such as Eko, Access Softek, and Wealthfront partnerships) to provide low-cost, automated investing
• Expanded their IRA, Roth IRA, and ESG investing options to attract younger members

The ability to offer investing directly through digital banking became a key differentiator, allowing credit unions to compete with fintechs and traditional banks.

2020s – A Fully Integrated Investment Experience

Today, many credit unions offer fully embedded investment services within their digital banking platforms. The focus has shifted from offering investment products through third-party brokers to directly integrating investing solutions into credit union apps. This allows members to:

• Open an investment account with as little as $10
• Access hybrid and self-directed investing without leaving their credit union’s app
• Plan for retirement through automated IRAs and financial coaching tools.

As credit unions continue to prioritize financial empowerment and long-term member relationships, investment services are expected to become an essential part of their digital banking experience, making investing more accessible, affordable, and community driven.

The evolution of investment services in credit unions reflects their commitment to financial inclusion and member empowerment. From offering basic savings tools to full-fledged investment platforms, credit unions have successfully adapted to changing financial landscapes while maintaining their member-first philosophy. As digital banking advances, integrated investing will continue to be a key growth area for credit unions looking to attract younger members and enhance financial well-being.

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