League & Trade Association Advice

A PROCLAMATION to all credit union trade associations and leagues. December 2025

December 4, 2025

Dear Leader of a Regional or National Credit Union Trade Association,

As President of the Endangered Small Credit Union Defense (ESCUD), I write on behalf of a growing coalition of small credit unions who are deeply committed to the cooperative mission this movement was founded on. Our organization, now endorsed by credit unions across multiple states and supported by many more, exists to ensure that the smallest institutions in our ecosystem remain viable, visible, and valued.

The American credit union movement was established on a simple but transformative idea:
that working people could pool their resources, govern themselves, and gain access to fair and affordable financial services through cooperation — not competition.

The earliest credit unions were small, local, member-led, and deeply rooted in community needs. Their strength came from close relationships, trust, and democratic governance. Their purpose was not to scale endlessly, but to serve their memberships and communities responsibly and sustainably.  Small credit unions remain the most faithful expression of that founding vision.

But today, the context has changed. The operational realities of a $50M credit union and a $10B credit union have diverged so dramatically that they now operate in different financial and regulatory worlds. Even when regulations differ by threshold, their impact is disproportionately heavier on small institutions, and the broader agenda is often shaped around the capacities of the largest.

This is the tension ESCUD is elevating, with the belief that the movement is healthiest when all parts of it are seen and supported.

The Challenge Facing Small Credit Unions

Small credit unions are struggling under compliance obligations created for institutions larger than themselves. Requirements like CECL, HMDA reporting, NMLS licensing, BSA standards, and dozens of others, impact institutions under $500M in ways never intended by policymakers and which cripple small credit unions already struggling under increased competitive pressure.  Meanwhile, consolidation continues at a rapid pace, narrowing the diversity of our ecosystem. Every time a small credit union disappears, a community loses a voice, members lose choice, and our movement loses part of the identity that gives meaning to our tax-exempt status. In addition, the public generally perceives large credit unions as indistinguishable from banks, which carries alarming implications for the future of our tax exemption.

These trends are not the fault of any one group, but they are a sign that the balance of our movement has shifted. ESCUD’s goal is to ensure this reality is finally recognized in the national conversation, and that the regulatory environment is changed to reflect it.

The Ask

To restore balance and protect the diversity and integrity of our movement, we ask trade associations to re-prioritize, as follows:

1. A Rebalanced Advocacy Agenda

Direct national and state advocacy toward small credit union regulatory relief as a top strategic priority, not an occasional talking point.

2. Tiered & Scale-Sensitive Regulation

Develop and champion exemptions and right-sized requirements for credit unions under $500M in assets, to correct disproportionate compliance burdens that are suffocating our small credit unions.

3. Increased Representation in Governance

Ensure small credit unions have meaningful and proportionate seats on boards, councils, and policy-shaping committees, to ensure our unique needs are properly prioritized.

4. Equity in Influence

Consider measures such as dues caps or governance safeguards to prevent the largest credit unions from overshadowing the collective voice of small credit unions. Consider the structural inequity that can arise when the membership dues of a single large credit union outweigh the dues of all the small credit unions combined.

5. Preservation of Cooperative Identity

Publicly champion the value of small credit unions as essential evidence of cooperative purpose, and the very foundation that underpins our tax exemption and differentiates us from banking.

ESCUD remains committed to partnership. But we are also prepared for the reality that the small credit union community is organizing its own support systems, networks, and shared advocacy structures. If existing associations choose to join in this renewal, the movement will be stronger for it. If not, the momentum among small credit unions to align with one another will continue, regardless.

This is not meant as a signal of division, but a reflection of where small credit unions find themselves today. As the segment of the movement that is most at risk, organizing is not optional for us; it is the practical path required for our survival and for preserving the cooperative model for generations to come.

When small credit unions thrive, the entire movement thrives.

We ask you to stand with us in that work.

I welcome the opportunity to discuss how we can collaborate.

Sincerely,

Doug Wadsworth

President, Endangered Small Credit Union Defense (ESCUD)

President, Tri-CU Credit Union, Kennewick, WA

If standing up for your small credit union makes you uncomfortable, consider the following: 

• Advocating for small credit unions is not divisive.

• Asking for proportional representation is not divisive.

• Naming structural inequality is not divisive.

• Forming alliances is not divisive.

• Organizing by scale is not divisive.

What is divisive? Allowing the largest credit unions and trades to monopolize the voice of the movement while silencing the smallest.

-Edward Speed

https://www.cutoday.info/THE-tude/Spock-Save-The-Small-Credit-Unions!