Survey: Bankers say competition for deposits is heating up

• Key insight: A new survey of community bankers shows that respondents view credit unions as the top competitor for deposits, even though bankers say their margins are improving from simpler capital requirements.
• Supporting data: Nearly two-thirds of bankers surveyed reported they’ve experienced rising competition from credit unions.
• Forward look: Eighty-two percent of respondents expect at least 11 more credit union bank acquisitions this year.

Community bankers are increasingly feeling the competition from credit unions, even as the Trump administration’s deregulatory efforts have eased capital requirements for lenders, according to the latest IntraFi Bank Executive Business Outlook Survey. 

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The survey polled 426 U.S. bank executives in January after commercial and industrial lending grew across credit unions over the first three quarters of 2025. 66% of respondents reported they felt increased competition for deposits and loans from the credit union sector as of the fourth quarter 2025.

Bankers surveyed similarly saw credit unions as leading competitors to buying banks as well. The vast majority of respondents — 82% — said they anticipate at least 11 more acquisitions this year. In 2025, 16 banks were acquired by credit unions, and another 22 banks were acquired by credit unions in 2024. 

Among respondents’ top concerns were the uneven competition between credit unions and banks, which 86% of respondents cited as their chief concern. No other concern came close to that level of urgency, with remaining issues like lower federal tax contributions (6%) weaker underwriting by credit unions (5%) or easier supervision at credit unions (3%) failing to command the same degree of concern. 

“Analysts believe a new record could occur in 2026, as credit unions remain an attractive option for small banks to secure all-cash buyers,” the survey concluded.

Bankers were also surveyed about easing capital requirements and the competitive impact of easier capital rules. Federal banking regulators in November issued a final rule that reduces the enhanced supplementary leverage ratio for global systemically important banks and their largest bank subsidiaries. Regulators also issued a proposal to reduce the community bank leverage ratio, or CBLR, to 8% from 9% and extend the compliance grace period to a year for qualified banks. Officials said they aim to finalize the change this summer, with an effective date as early as October 1, 2026.

The White House’s emphasis on deregulation has lessened the regulatory burden on banks, but the counteracting effect of new entrants into the banking sphere mean many bankers remain concerned with competitive pressure. 

While less onerous capital requirements may improve liquidity and pricing conditions, bankers said they also serve as a mixed blessing. Of those surveyed, 37% of bankers said they expect more pressure on deposit pricing, and 36% foresee greater lending competition as a result of these reforms. The looser capital environment also has raised bankers’ concerns that financial stability may be in jeopardy, with 32% believing the lower capital standards may undermine both financial stability and competitive balance. A similar proportion reported that they didn’t anticipate a significant impact on financial stability. 

Bankers’ dim competitive outlook comes at a time when more than a dozen cryptocurrency and fintech firms have applied for national trust charters with the Office of the Comptroller of the Currency, and several have already had those applications approved. Banks have viewed that development with concern, arguing that crypto firms with national trust charters may compete with traditional banks without comparable oversight. While stablecoins technically cannot bear interest, many of these companies have incorporated yield-like “rewards” to incentivize new customers.