Bankers Express Concerns Over Credit Union Encroachment on Traditional Banks

Increasing Competition in the Banking Sector

In recent years, the mergers and acquisitions within the banking sector have experienced a notable resurgence. Bank executives are voicing concerns about escalating competitive pressures, particularly from credit unions. This shift in the market dynamic has sparked discussions about maintaining a balance in competition and the implications for traditional banking.

According to the latest survey conducted by fintech company IntraFi, over 170 bank merger and acquisition (M&A) deals were reported in 2025. Notably, credit unions contributed to about 10% of these transactions. A staggering 86% of surveyed bankers have flagged uneven competition as their primary concern pertaining to these acquisitions. Furthermore, an impressive 82% of respondents predict that there will be 11 or more credit union acquisitions in the upcoming year, 2026.

Mark Jacobsen, co-founder and CEO of IntraFi, emphasized the shifting competitive landscape among financial institutions. He stated, "As acquisition activity continues, respondents are reporting increased pressure on deposits and lending."

The survey revealed that 66% of banking executives noted intensified competition for loans and deposits, attributed directly to the activities of credit unions. This competition is expected to tighten further, with 94% anticipating that the fierce chase for deposits will either stay the same or escalate in the next 12 months.

Interestingly, nearly half of the banks reported an uptick in loan demand during 2025, with 56% expecting this trend to continue into 2026. Meanwhile, 97% of the respondents are optimistic about either maintaining or enhancing their access to capital in the upcoming year.

The findings from IntraFi’s Q4 2025 Bank Executive Business Outlook Survey are based on feedback from 426 executives, including CEOs, presidents, and CFOs, across various banks nationwide. This comprehensive overview sheds light on the shifting dynamics of the banking world, primarily influenced by the growing presence of credit unions as formidable competitors.

The Implications of Credit Union Activity

The increasing trend of credit unions acquiring traditional banks poses significant questions about how these changes will affect consumers and the financial industry overall. With credit unions often having different operating procedures and market approaches compared to traditional banks, this shift could result in varied customer experiences and service offerings.

As banks brace themselves for these developments, many are reassessing their strategies to compete more effectively. This includes enhanced customer service, improved rates on loans and deposits, and innovative financial products tailored to meet consumer needs.

IntraFi has positioned itself as a vital partner for over 3,000 financial service companies by focusing on fostering quality relationships rather than just processing transactions in high volumes. Established over two decades, its network aids smaller institutions in accessing necessary funding and liquidity while prioritizing the stability of their customer relationships.

Conclusion

The landscape of the banking sector is evolving quickly, driven by the aggressive strides made by credit unions. As traditional banks navigate through these competitive waters, it remains critical for them to adapt to ensure they can continue to serve their customers effectively while also addressing the competitive pressures from these non-traditional lenders. The next year will be pivotal in tracking how these trends unfold and what strategies will help banks reclaim a competitive edge in an increasingly crowded marketplace.

For further insights, access the full report from IntraFi and stay informed about the outcomes of these upcoming market changes.