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.
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.
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.
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.
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:
Larger credit unions started hiring dedicated financial advisors to provide investment advice directly to members.
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:
This period saw a shift from transaction-based investment sales to holistic financial planning, with an emphasis on helping members build long-term wealth.
The rise of robo-advisors and embedded investing solutions led credit unions to seek seamless, digital-first investment offerings. Many credit unions:
The ability to offer investing directly through digital banking became a key differentiator, allowing credit unions to compete with fintechs and traditional banks.
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:
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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