Banks' profitability has declined, but loan write-offs are only a tiny percentage of their credit and have not contributed much to the fall in profitability. Credit unions are the banks’ competition. Because of their mutual ownership, they are able to offer lower interest spreads than the banks, between what members earn on their shares, and the interest they pay on borrowings.
Credit unions currently offer most of the services banks offer, and there are no barriers in principle to prevent those credit unions which qualify from providing the remaining services in which they have expressed an interest. Insurance and pension funds cover the remainder of the financial services most businesses and households need.