A $13 million annual CEO salary at a member-owned credit union signals governance drift and extracts millions directly from members through fees, rate spreads, and lower savings yields before any other operating cost is incurred.
This critique applies to credit union members who assume the not-for-profit structure automatically delivers better rates and fees, but fails to verify executive compensation, compare APY against 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 on his local credit union and did not like what he found. The area’s largest credit union charged high overdraft fees, carried relatively high mortgage rates, spent heavily on advertising, and paid its CEO $13 million per year. Michael brought this to consumer advocate Clark Howard, whose podcast regularly champions credit unions as the smarter alternative to big banks.
“Their CEO makes $13 million per 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 research before joining.
Howard did not dismiss the critique. His response was unusually blunt for someone who has spent decades endorsing the credit union model.
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Credit unions are member-owned, not-for-profit cooperatives. The structural promise is that without shareholders demanding returns, the institution can offer better savings rates, lower loan rates, and fewer fees than a traditional bank. That promise is real. The problem is that “member-owned” does not automatically mean “member-controlled.”
“Management of a credit union can basically hijack it and make it to enrich themselves as managers instead of serving the members who own it,” Howard said. This is the core financial mechanic the $13 million salary story exposes: governance drift.
Governance drift happens when the people elected to oversee an institution stop representing the people who own it. In a credit union, the board is supposed to be elected by members. But most members never vote. Turnout in credit union board elections is typically in the low 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 CEO salary at a not-for-profit cooperative signals that the governance structure has stopped functioning. That money comes directly from members, either through fees, loan rate spreads, or lower savings yields than the institution could otherwise afford to pay.
Consider what $13 million in annual executive compensation means in practical terms for members. If a credit union has hundreds of thousands of members, that salary alone represents a meaningful per-member cost extracted before any other operating cost. That figure does not include other senior executive salaries, advertising budgets, or overhead that may similarly reflect management priorities over member value.
Meanwhile, Americans saved just 4.0% of disposable personal income in the fourth quarter of 2025, down from 6.2% in the first quarter of 2024. With savings rates declining and inflation running above recent historical norms, the difference between a credit union that genuinely returns value to members and one that funnels it to management is real and measurable. It shows up in your savings account yield, your mortgage rate, and your overdraft fee.
Howard still defended the credit union model overall. Banks are structurally designed to extract profit from customers. Credit unions structurally 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.
“Members control the board. Or should. And if you got a bunch of bums running the place, you throw the rascals out,” Howard said. That is correct in theory. Here is how to make it practical.
Look up the 990 filing. Credit unions with over $50 million in assets file Form 990 with the IRS, which is public. The 990 lists executive compensation. If the CEO salary looks more like a Wall Street bank than a community cooperative, that is a concrete data point, not an impression.
Compare rates directly. Check the credit union’s savings APY and mortgage rates against competitors. Sites like Bankrate publish current averages. If a credit union’s rates are not clearly better than the regional bank down the street, ask why the member-owned structure is not producing the expected benefit.
Check the fee schedule. Overdraft fees, monthly maintenance fees, and ATM fees should all be lower than or comparable to the best online banks. High fees at a not-for-profit institution are a governance red flag.
Vote in board elections. Most credit union members never do. If you are a member, vote. If the institution does not make voting easy or transparent, that is worth noting.
The $13 million salary story reinforces a simple principle: treat “member-owned” as a starting point for evaluation, not a guarantee of good behavior.
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