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A $13 million annual salary as CEO at a member-owned credit union indicates governance drift and extracts millions directly from members through fees, rate differentials, and lower returns on savings before any other operating costs are incurred.
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This criticism applies to credit union members who assume the nonprofit structure automatically offers better rates and fees, but don’t check executive compensation, compare APY to their competitors, or participate in board elections where turnout typically falls below 5%.
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A listener named Michael from California did some homework at his local credit union and didn’t like what he found. The area’s largest credit union charged high overdraft fees, had relatively high mortgage rates, spent heavily on advertising, and paid its CEO $13 million a year. Michael raised this with consumer advocate Clark Howard, whose podcast regularly defends credit unions as the smarter alternative to big banks.
“Their CEO makes $13 million a year. What? I don’t think their members know any of this,” Michael said. He found better mortgage rates in the private sector and encouraged people to do their research before joining.
Howard did not dismiss the criticism. His response was unusually forceful for someone who has spent decades supporting the credit union model.
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Credit unions are nonprofit cooperatives owned by their members. The structural promise is that, without shareholders demanding returns, the institution can offer better savings rates, lower lending rates and fewer fees than a traditional bank. That promise is real. The problem is that “member owned” does not automatically mean “member controlled.”
“The management of a credit union can basically hijack it and enrich themselves as managers instead of serving the member owners,” Howard said. This is the central financial mechanism that exposes the $13 million salary story: governance drift.
Governance drift occurs when the people chosen to oversee an institution no longer represent its owners. In a credit union, the board of directors is supposed to be elected by the members. But most members never vote. Turnout in credit union board elections is typically in the single digits. When almost no one votes, incumbent board members face no real accountability, and the executives those boards hire and compensate face even less.
A $13 million salary as CEO at a nonprofit cooperative indicates that the governance structure has stopped working. That money comes directly from members, whether through fees, loan rate spreads, or lower savings yields than the institution could afford to pay.
Let’s consider what $13 million in annual executive compensation for members means in practical terms. If a credit union has hundreds of thousands of members, that salary alone represents a significant cost per member drawn before any other operating costs. That figure does not include other top executive salaries, advertising budgets or overhead expenses that may similarly reflect management’s priorities over member value.
Meanwhile, Americans saved just 4.0% of their personal disposable income in the fourth quarter of 2025, down from 6.2% in the first quarter of 2024. With savings rates declining and inflation outpacing recent historical norms, the difference between a credit union that actually returns value to members and one that funnels it to management is real and measurable. It shows up in your savings account performance, mortgage rate, and overdraft fee.
Howard still defended the credit union model in general. Banks are structurally designed to extract profits from customers. Structurally, credit unions are not supposed to be. That difference matters most of the time. But “most of the time” is not the same as “always,” and Michael’s experience is proof of that.
“The members control the board. Or they should. And if you have a bunch of bums running the place, you throw the scoundrels out,” Howard said. That’s correct in theory. Here’s how to make it practical.
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Look for Filing 990. Credit unions with more than $50 million in assets file Form 990 with the IRS, which is public. 990 lists executive compensation. If the CEO’s salary is more like a Wall Street bank than a community cooperative, that’s a fact, not an impression.
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Compare rates directly. Check the credit union’s savings APY and mortgage rates against its competitors. Sites like Bankrate publish current averages. If a credit union’s interest rates are not clearly better than those of the nearby regional bank, ask why its member-owned structure is not producing the expected profit.
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Check the rate table. Overdraft fees, monthly maintenance fees, and ATM fees should be lower than or comparable to the best online banks. High fees at a nonprofit institution are a governance red flag.
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Vote in board of directors elections. Most credit union members never do. If you are a member, vote. If the institution doesn’t make voting easy or transparent, it’s worth pointing out.
The $13 million salary story reinforces a simple principle: treat “member ownership” as a starting point for evaluation, not as a guarantee of good behavior.
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